Moving to Dismiss Is Not the Same as Moving to Compel Arbitration

Florida’s Third District Court of Appeal ruled this week that it had no jurisdiction (authority) to consider a trial court order refusing to dismiss a lawsuit despite the parties’ agreement to arbitrate. The court dismissed the appeal.

At first blush the outcome seems to have rewritten the parties’ agreement to arbitrate, but closer reading of the court’s decision reveals a well-reasoned opinion that provides a road map for attorneys and parties who sincerely wish to enforce agreements to arbitrate.

This week’s case arose from a buyer’s failure to close two multi-million dollar real estate contracts. The sellers sued for breach of contract, specific performance, and fraud; the buyer immediately moved to dismiss. The buyer argued, among other things, that the parties were governed by an agreement to arbitrate. The buyer did not, however, ask the trial court to compel arbitration. The trial court denied the buyer’s motion to dismiss, and the buyer appealed.

By dismissing the appeal the court of appeal effectively affirmed the trial court’s ruling. But the court of appeal also provided three valuable takeaways:

  1. Orders merely denying motions to dismiss do not determine entitlement to arbitration. Therefore, orders denying motions to dismiss do not fall under the rule of appellate procedure authorizing appeals of nonfinal orders that “determine . . . the entitlement of a party to arbitration”;
  2. Agreements to arbitrate are not self-executing. Even if claims are subject to arbitration, dismissal of a civil action is not required where no motion to compel arbitration has been filed. A party desiring to enforce an agreement to arbitrate must move in that direction. Trial courts may, but are not required to, construe a motion to dismiss as a motion to compel arbitration; and
  3. The Florida Arbitration Code authorizes courts to stay actions based on claims subject to arbitration. Thus, “[t]he trial court must stay the case and retain jurisdiction, for example, to confirm and enforce the arbitration award once one is handed down.”

The case is Gomez v. S & I Properties, LLC, ___So. 3d ___, 42 Fla. L. Weekly D1315a (Fla. 3d DCA June 7, 2017).

By | 2017-06-08T14:19:03+00:00 June 8th, 2017|Case Law|Comments Off on Moving to Dismiss Is Not the Same as Moving to Compel Arbitration