DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
LINDA DEWEES,
Appellant,
v.
DON ALLEN JOHNSON, GL BUILDING CORPORATION, BOYNTON
BEACH ASSOCIATES XXII, LLLP, and BOYNTON BEACH XXII
CORPORATION,
Appellees.
No. 4D21-446
[November 3, 2021]
Appeal of nonfinal orders from the Circuit Court for the Fifteenth
Judicial Circuit, Palm Beach County; Cymonie Rowe, Judge; L.T. Case No.
50-2020-CA-004912-XXXX-MB.
Philip M. Burlington and Nichole J. Segal of Burlington & Rockenbach,
P.A., West Palm Beach, and Howard S. Grossman and Callie J. Fixelle of
Grossman Attorneys at Law, Boca Raton, for appellant.
Elliot B. Kula and William D. Mueller of Kula & Associates, P.A., Miami,
and Eric J. Neuman of Neuman Law, P.A., Boca Raton, for appellees.
PER CURIAM.
Linda Dewees appeals a nonfinal order compelling arbitration of her
negligence and breach of duty claims and staying litigation of those claims
in an action she brought against a real estate developer. Because these
claims do not implicate contractual duties created or governed by the
contract but concern duties generally owed to the public, we conclude that
a significant relationship does not exist between the claims and the
agreement containing the arbitration clause. Accordingly, we reverse.
Factual and Procedural Background
Dewees purchased a home in a private residential community named
Valencia Bay from the developer pursuant to a Purchase Contract, which
contained the following provision regarding dispute resolution procedures:
22. Dispute Resolution Procedures. Please read this section
carefully, as it greatly impacts purchaser’s rights in the event
of a dispute with seller. This contract provides that all post-
closing claims, disputes, and controversies (hereinafter
collectively “claims”) between purchaser and seller will be
resolved by binding arbitration except those arising under
sections G.5 and G.6 above. A claim is considered to have
arisen post-closing if it is asserted after purchaser closes on
the sale of the home, even if the claim is based upon events
that may have occurred pre-closing (e.g., the construction of
the residence, or statements made during the sales process).
Where claims are subject to binding arbitration, purchaser
and seller give up their rights to go to court and resolve the
claim. In that regard, purchaser and seller hereby mutually,
knowingly and voluntarily agree that, except with respect to
claims arising pursuant to sections G.5 and G.6 above[1], any
and all claims by or between purchaser and seller which occur
post-closing, even those based upon a theory not recognized
at the time this agreement is executed, shall be submitted to
binding arbitration for resolution, such claims include,
without limitation, claims that arise from or in connection
with, or relate to: (A) this contract or any document executed,
or contemplated to be executed, in conjunction with this
1 Sections G.5 and G.6 provide:
5. Sales Interference. Purchaser agrees not to interfere in any
manner whatsoever, directly or indirectly, in the sales process . . .
with other purchasers or prospective purchasers whether in, near
or around or in the vicinity of the Community or any other
community owned or developed by Seller or any of its affiliates, or
elsewhere. . . .
6. Construction Interference. Purchaser agrees that all matters
pertaining to construction will be discussed by Purchaser only at
the office of Seller. Purchaser agrees that Purchaser and
Purchaser’s agents and representatives shall not in any way
interfere with workmen during the construction of the Home or the
completion of the work specified in the inspection List and/or in the
performance of any work pursuant to the Dwelling Warranty or
otherwise. Purchaser further agrees that Purchaser and
Purchaser’s agents and representatives shall not visit the
construction site without Seller’s prior written consent, which Seller
may grant or deny in Seller’s sole discretion . . . .
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contract; (B) the transaction contemplated by this contract;
(C) the home, its design, or its construction; (D) the real
property on which the home is situated; (E) the sale of the
home; (F) any course of conduct, course of dealing, or
statements (verbal or written) of the parties to the claim; (G)
any actions or inactions of the parties to the claim; or (H) any
disputes concerning the interpretation or enforceability of the
dispute resolution proceedings set forth in this section,
including without limitation, its revocability or voidability for
any cause, the scope of arbitrable issues, and any defense
based upon waiver, estoppel or laches. This provision shall
apply to all post-closing claims (except those claims arising
pursuant to sections G.5 and G.6 above) regardless of the legal
theory alleged (including, without limitation, breach of
contract, tort, violation of statute, code, rule or regulation, or
breach of any implied covenant or duty), the type of injury
alleged (including, without limitation, monetary, property
damage, personal injury, emotional injury, or death) the type
of relief sought (legal or equitable) or the type or amount of
damages sought (compensatory, punitive, consequential,
special, incidental, or otherwise). Arbitration of such claims
shall be conducted . . . in accordance with the rules of the
applicable arbitration service in effect at the time that the
arbitration is initiated, as well as the Federal Arbitration Act .
. . and the terms of the dwelling warranty . . . . In the event
of any conflict, the terms of the dwelling warranty shall
govern. . . .
The Dwelling Warranty, contained in Section H.22 of the Purchase
Contract, provides a one-year workmanship and two-year systems defect
warranty and a structural defect warranty:
SECTION VI. ARBITRATION OF DISPUTES.*
To expedite the resolution of any and all claims, disputes and
controversies by or between the Homeowner, the
Builder/Seller, 2-10 HBW, as administrator, the Warranty
Insurer or any combination of the foregoing, arising from or
related to this Warranty, the Warranty Insurance Policy or the
2-10 HBW Program, Claims shall be settled by binding
arbitration. . . .
Eighteen months after entering into the Purchase Contract, Dewees
suffered injuries while riding her bicycle through the Valencia Bay
community to visit its warranty office. The roadways through the
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community were under construction by the developer and missing asphalt
needed to level the pavement and concrete gutter portions with one
another, causing an elevation change. This uneven road caused the front
tire on Dewees’s bicycle to hit the roadway lip. She lost control, fell off her
bicycle, and sustained injuries.
After the incident, Dewees filed an eleven-count complaint against the
developer, GL Building Corporation (the company hired to construct the
road), Don Johnson (the general contractor), and Boynton Beach XXII
Corporation. The complaint contained three counts against the developer:
1. Negligence for failing to ensure all travel lanes were safe for
pedestrians and bicyclists to utilize; to ensure the design,
engineering, construction, supervision, and/or inspection
of the incomplete roadway was in accordance with design
standards and did not result in abrupt elevation changes;
to implement standards which reduced the height of the
vertical pavement edges on or near roadway surfaces that
were open to bicyclists; to install and maintain traffic
control and safety during the incomplete construction; to
maintain existing or detour facilities; and to exercise
reasonable care under all circumstances;
2. Negligence for failing to warn pedestrians and bicyclists
using the incomplete roadway of known and inherent
hazards; and
3. Breach of its nondelegable duty to maintain the premises
in a safe and reasonable manner for invitees.
The developer moved for arbitration and to stay litigation based upon
the terms of the Purchase Contract and Dwelling Warranty. The developer
claimed that each of the claims against it fell under the arbitration
provision of the Purchase Contract because the purpose of Dewees’s
presence and related fall was to visit the warranty office to report a claim
under the Dwelling Warranty. Thus, the developer argued that Dewees’s
claims arose from, are in connection with, or relate to the Purchase
Contract and Dwelling Agreement, the obligations of the developer as part
of the transaction contemplated by the Purchase Contract, the process for
constructing and warrantying the home, and the process under the
Purchase Contract for the sale of the home. Dewees responded that the
arbitration provision contained in the Purchase Contract applied only to
disputes related to the purchase and sale of her home, not tort claims
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stemming from injuries suffered by her on the developer’s property
eighteen months after the purchase.
The trial court held a hearing on the motion to compel arbitration.
After, the trial court entered an order granting the developer’s motion to
compel arbitration and staying the case. Dewees moved for rehearing, or
alternatively, clarification. The trial court entered an order clarifying that
its initial order granted the motion to compel arbitration and stay as to the
developer only, not the other defendants named in the complaint.
This appeal follows.
Analysis
“An order granting or denying a motion to compel arbitration is
reviewed de novo” when it presents a pure question of law. DFC Homes of
Fla. v. Lawrence,
8 So. 3d 1281, 1282 (Fla. 4th DCA 2009). “[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.” Seifert v. U.S. Home Corp.,
750 So. 2d
633, 636 (Fla. 1999). Element two is at issue here.
Determining whether an arbitrable issue exists requires the court to
examine the plain language of the parties’ arbitration agreement. See Lake
City Fire & Rescue Ass’n, Local 2288 v. City of Lake City,
240 So. 3d 128,
130 (Fla. 1st DCA 2018). “Contracts with arbitration clauses create a
presumption of arbitrability.” Robertson Grp., P.A. v. Robertson,
67 So. 3d
1112, 1114 (Fla. 1st DCA 2011). “Any doubt in the scope of an arbitration
agreement should be resolved in favor of arbitration.”
Id.
Here, the arbitration provisions included in the Purchase Contract
provide that “all post-closing claims, disputes, and controversies . . .
between purchaser and seller will be resolved by binding arbitration except
those arising under sections G.5 and G.6 above,” and:
any and all claims by or between purchaser and seller which
occur post-closing, even those based upon a theory not
recognized at the time this agreement is executed, shall be
submitted to binding arbitration for resolution, such claims
include, without limitation, claims that arise from or in
connection with, or relate to: (A) this contract or any
document executed, or contemplated to be executed, in
conjunction with this contract; (B) the transaction
contemplated by this contract; (C) the home, its design, or its
5
construction; (D) the real property on which the home is
situated; (E) the sale of the home; (F) any course of conduct,
course of dealing, or statements (verbal or written) of the
parties to the claim; (G) any actions or inactions of the parties
to the claim; or (H) any disputes concerning the interpretation
or enforceability of the dispute resolution proceeding set forth
in this section, including without limitation, its revocability or
voidability for any cause, the scope of arbitrable issues, and
any defense based upon waiver, estoppel or laches. This
provision shall apply to all post-closing claims (except those
claims pursuant to sections G.5 and G.6 above) regardless of
the legal theory alleged (including, without limitation, breach
of contract, tort, violation of statute, code, rule or regulation,
or breach of any implied covenant or duty), the type of injury
alleged (including, without limitation, monetary, property
damage, personal injury, emotional injury, or death) the type
of relief sought (legal or equitable) or the type or amount of
damages sought (compensatory, punitive, consequential,
special, incidental, or otherwise).
(emphasis added).
Thus, the arbitration provision in this case includes broad arbitration
language. “Deciding whether a particular claim is covered by a broad
arbitration provision requires a determination of whether a significant
relationship exists between the claim and the agreement containing the
arbitration clause, regardless of the legal label attached to the dispute.”
King Motor Co. of Fort Lauderdale v. Jones,
901 So. 2d 1017, 1019 (Fla.
4th DCA 2005) (citing Seifert,
750 So. 2d at 637-38). “[A] significant
relationship is described to exist between an arbitration provision and a
claim if there is a ‘contractual nexus’ between the claim and the contract.”
Baker v. Econ. Rsch. Servs., Inc.,
242 So. 3d 450, 455 (Fla. 1st DCA 2018)
(quoting Jackson v. Shakespeare Found., Inc.,
108 So. 3d 587, 593 (Fla.
2013)).
“A contractual nexus exists between a claim and a contract if the claim
presents circumstances in which the resolution of the disputed issue
requires either reference to, or construction of, a portion of the contract.”
Id. (quoting Jackson,
108 So. 3d at 593); see also Seifert,
750 So. 2d at
638. “More specifically, a claim has a nexus to a contract and arises from
the terms of the contract if it emanates from an inimitable duty created by
the parties’ unique contractual relationship.” Jackson,
108 So. 3d at 593.
“In contrast, a claim does not have a nexus to a contract if it pertains to
the breach of a duty otherwise imposed by law or in recognition of public
6
policy, such as a duty under the general common law owed not only to the
contracting parties but also to third parties and the public.”
Id.
Here, because the Purchase Contract includes an arbitration provision
containing broad arbitration language, the claims subject to arbitration
are not only those that arise out of the Purchase Contract but also those
with a significant relationship to the Purchase Contract. Dewees’s
argument that her claims do not have a significant relationship with the
Purchase Contract primarily relies on Seifert.
In Seifert, the plaintiff brought a wrongful death action against her
house builder after she and her husband contracted with the builder to
construct a new house and the husband died after leaving his car running
in the garage.
750 So. 2d at 635. Their air conditioning system, which
was located in the garage, picked up the carbon monoxide emissions from
the husband’s car and distributed the emissions throughout the house,
causing his death.
Id. The plaintiff, as personal representative of her
husband’s estate, sued the builder for negligence, among other claims.
Id.
The builder moved to compel arbitration on the negligence claims, arguing
that they were within the scope of the arbitration provision contained in
the purchase contract, which provided for arbitration of “[a]ny controversy
or claim arising under or related to this Agreement or to the Property.”
Id.
The Fifth District held that the issue was arbitrable because the claims
arose under or related to the contract for construction of the home. U.S.
Home Corp. v. Seifert,
699 So. 2d 787 (Fla. 5th DCA 1997). However, the
Florida Supreme Court quashed the decision, recognizing that “even in
contracts containing broad arbitration provisions, the determination of
whether a particular claim must be submitted to arbitration necessarily
depends on the existence of some nexus between the dispute and the
contract containing the arbitration clause.” Seifert,
750 So. 2d at 638.
The supreme court disagreed that an arbitration provision in a purchase
and sale agreement necessarily requires “arbitration of a subsequent and
independent tort action based upon common law duties.”
Id. at 635.
“[T]he mere fact that the dispute would not have arisen but for the
existence of the contract and consequent relationship between the parties
is insufficient by itself to transform a dispute into one ‘arising out of or
relating to’ the agreement.”
Id. at 638. For a dispute to be related to the
subject matter of a contract, and thus subject to arbitration, “it must, at
the very least, raise some issue the resolution of which requires a reference
to or construction of some portion of the contract itself.”
Id. at 639
(citation omitted). After reviewing case law from Florida and other
jurisdictions, the supreme court adopted our reasoning in Terminix
International Co. v. Michaels,
668 So. 2d 1013 (Fla. 4th DCA 1996).
7
In Terminix, we relied upon and adopted the Arizona Court of Appeal’s
holding in Dusold v. Porta–John Corp.,
807 P.2d 526 (Ariz. Ct. App. 1990):
[T]he better-reasoned cases start with the premise that, in
order for the dispute to be characterized as arising out of or
related to the subject matter of the contract, and thus subject
to arbitration, it must, at the very least, raise some issue the
resolution of which requires a reference to or construction of
some portion of the contract itself.
Id. [Old Dutch Farms, Inc.
v. Milk Drivers & Dairy Emp. Local Union No. 584,
359 F.2d
598 (2d Cir. 1966)]. The relationship between the dispute and
the contract is not satisfied simply because the dispute would
not have arisen absent the existence of a contract between the
parties. Armada Coal Export, Inc. v. Interbulk, Ltd.,
726 F.2d
1566 (11th Cir. 1984). See also McMahon v. RMS Electronics,
Inc.,
618 F. Supp. 189 (S.D.N.Y. 1985) (where tort claim does
not require an interpretation of the underlying contract, no
arbitration of that claim is required); Popper [v. Monroe], 673
F. Supp. [1228] at 1228 [S.D.N.Y. 1987] (if defamatory
statements have no material relationship to contractual
relationship, no arbitration required). If such a connection to
the contract is not present, tort claims between the parties
could not reasonably be intended to have been subject to
arbitration within the meaning of an arbitration clause
requiring this method of resolution only for claims “arising out
of or related to” the contract.
If the contract places the parties in a unique relationship that
creates new duties not otherwise imposed by law, then a
dispute regarding a breach of a contractually-imposed duty is
one that arises from the contract. Barmat [v. John and Jane
Doe Partners A–D], 155 Ariz. [519] at 523, 747 P.2d [1218] at
1222 [1989]. Analogously, such a claim would be one arising
from the contract terms and therefore subject to arbitration
where the contract required it. If, on the other hand, the duty
alleged to be breached is one imposed by law in recognition of
public policy and is generally owed to others besides the
contracting parties, then a dispute regarding such a breach is
not one arising from the contract, but sounds in tort.
Id.
Therefore, a contractually-imposed arbitration requirement . .
. would not apply to such a claim.
8
Terminix Int’l Co.,
668 So. 2d 1014-15 (quoting Dusold,
807 P.2d at 530-
31) (emphasis added) (alterations in original).
Applying those principles, we agree with Dewees that there is no
significant relationship between her claims against the developer and the
Purchase Contract. This case involves tort claims based on the developer’s
alleged breach of its nondelegable duty to maintain its premises in a safe
and reasonable manner for invitees and its duty to warn pedestrians and
bicyclists using the incomplete roadways of unknown and inherent
hazards of which the developer was and/or should have been and/or
become aware.
The claims do not refer to or implicate contractual duties created or
governed by the Purchase Contract or Dwelling Warranty but concern
duties generally owed to the public, including all invitees using the
roadways in Valencia Bay. None of the allegations in the complaint require
reference to or construction of any portion of the Purchase Contract or
Dwelling Warranty. The allegations instead rely on obligations that would
extend to anyone who might be injured by the developer’s tortious conduct.
Unlike in Seifert, however, the Purchase Contract does contemplate
personal injury claims. See Seifert,
750 So. 2d at 641 (“[T]he only reference
to casualties relates solely to damages to the property itself and not to
personal injuries suffered by either party as a consequence of the tortious
conduct of the other.”). Here, the arbitration provision provides that the
parties agree all post-closing claims “regardless of the legal theory alleged
(including, without limitation, . . . personal injury)” are subject to
arbitration.
Despite the arbitration provision in this case being broad and
specifically including personal injury claims, there is nevertheless no
nexus between the dispute and Purchase Contract such that it would be
fair to presume this type of dispute—Dewees falling off her bicycle in the
community in which she bought her home due to the developer’s
negligence and breach of duty owed to all pedestrians and bicyclists using
that route—was intended to be subject to the arbitration provision
contained in the Purchase Contract.
Because Dewees’s negligence and breach of duty claims have no
significant relationship with the Purchase Contract containing the
arbitration provision, the claims are not subject to arbitration. We reverse
and remand for proceedings consistent with this opinion.
Reversed and remanded for further proceedings.
9
LEVINE, KLINGENSMITH and KUNTZ, JJ., concur.
* * *
Not final until disposition of timely filed motion for rehearing.
10
