Summary: 5th DCA agrees with trial Court that an arbitration agreement is completely void if it deprives a party of constitutional rights.
IN THE DISTRICT COURT OF APPEAL OF THE
FIFTH DISTRICT OF FLORIDA
DURANGO STEAKHOUSE,
Appellant,
v. APPEAL No. 5D08-3189
L.T. No. 05-2008-CA-25417
AMANDA FERRUZZA,
Appellee.
______________________________/
ANSWER BRIEF OF APPELLEE, AMANDA FERRUZZA
Submitted by:
Maurice Arcadier
Florida Bar No. 131180
Allen & Arcadier, P.A.
2815 W New Haven, Suite 304
Melbourne, Florida 32904
Phone: (321) 953-5998
Fax: (321) 953-6075
TABLE OF CONTENTS
TABLE OF CONTENTS 2
TABLE OF AUTHORITIES 3-4
STATEMENT OF THE CASE AND FACTS 5
SUMMARY OF THE ARGUMENT 6
STANDARD OF REVIEW 7
ARGUMENT 8-12
I. THIS COURT HAS AUTHORITY TO DETERMINE IF AN INVALID AGREEMENT WAS ENTERED BY FERRUZZA AND DURANGO 8-9
II. TITLE VII OF THE CIVIL RIGHTS ACT OF 1964 AND THE FLORIDA CIVIL RIGHTS ACT ASSERT THE PREVAILING PARTY IS ENTITLED TO ATTORNEY’S FEES REIMBURSED 9-11
III. THE ENTIRE AGREEMENT IS UNENFORCEABLE BECAUSE THE AGREEMENT DID NOT PRODIVDE FERRUZA AN OPPORTUNITY TO RECOVER HER ENTITLED STATUTORY DAMAGES 11-12
CONCLUSION 13
CERTIFICATE OF SERVICE 14
CERTIFICATE OF COMPLIANCE 15
TABLE OF AUTHORITIES
CASES
D’Angelo v. Fitzmaurice,
863 So. 2d 311 (Fla. 2003) 7
Gilmer v. International/Johnson Lane Corp.,
500 U.S. 20 (1991). 10
Global Travel Marketing, Inc. v. Shea,
908 So. 2d 392 (Fla. 1999). 10
Morrison v. Circuit City Stores, Inc.,
317 F.3d 646 (6th Cir. 2003). 10
Paladino v. Avnet Computer Technologies, Inc.,
134 F. 3d 1054 (11th Cir. 1998). 11
Presidential Leasing, Inc. v Krout,
896 So. 2d 938 (Fla. 5th DCA 2005). 7, 11, 12
SA-PG-Ocala, LLC. v. Stokes,
935 So. 2d 1242 (Fla. 5th DCA 2006). 8
Seifert v. U.S. Home Corp.,
750 So. 2d 633 (Fla. 1999). 8
Terminix Int’l Co. L.P. v. Ponzio,
693 So. 2d 104 (Fla. 5th DCA 1997). 8
STATUTES AND ADMINISTRATIVE CODES
9 U.S.C. § 2 (2000) 10
42 U.S.C. § 2000(e)-5(k) 9
Florida Statutes § 760.11(5) 9
RULES
Fla. R. App. P. 9.210(a)(2) 15
STATEMENT OF THE CASE AND FACTS
Appellant, Durango Steakhouse (“Durango”), seeks review of the Circuit Court of the Eighteenth Judicial Circuit’s order denying Durango’s Motion to Compel Arbitration and Stay Action entered on August 13, 2008. The Circuit Court invalidated the Acknowledgment of Arbitration Agreement (“Agreement”) because the Agreement unlawfully eliminated rights afforded to individuals pursuant to Florida Statutes Chapter 760. The issue before this Court is whether the Circuit Court erred denying to stay this action and compel the parties to submit the issues raised in the Complaint to arbitration.
On April 7, 2008, Appellee, Amanda Ferruzza (“Ferruzza”), filed a cause of action in the Circuit Court of the Eighteenth Judicial Circuit based on pregnancy discrimination under Chapter 760 of the Florida Statutes. On May 9, 2008, Durango filed a Motion to Compel Arbitration and to Stay Action. A hearing was held on August 1, 2008 regarding this motion. The Circuit Court denied Durango’s motion and ruled that the Agreement contained an unlawful provision, which rendered the arbitration agreement unenforceable.
SUMMARY OF THE ARGUMENT
The unenforceability of the arbitration agreement entered by Durango and Ferruzza is an issue that was correctly decided by the Circuit Court of the Eighteenth Judicial Circuit. Courts have authority to determine whether a valid arbitration agreement exists when ruling on a motion to compel. As such, the Circuit Court of the Eighteenth Judicial Circuit properly ruled it had authority to determine if a valid arbitration agreement existed.
The Agreement was not valid pursuant to Florida Statutes and Title VII of the Civil Rights Act of 1964. The Agreement required all employment disputes be brought to an arbitrator, and further, the Agreement required both parties to bear their own costs. Both the Florida Statutes and Title VII allow a prevailing plaintiff to recover attorney’s fees; however, the Agreement agreed upon would diminish the rights afforded to Ferruzza under these laws. Thus, the entire Agreement was tainted.
STANDARD OF REVIEW
This appeal reviews the order issued from the Circuit Court of the Eighteenth Judicial Circuit denying Durango’s Motion to Compel Arbitration and to Stay Action. Since the validity of the arbitration agreement is a pure question of law arising from undisputed facts, the Fifth District Court of Appeal reviews these determinations de novo. See Presidential Leasing, Inc., etc., v. Krout, 896 So. 2d 938, 940 (Fla. 5th DCA 2005); see also D’Angelo v. Fitzmaurice, 863 So. 2d 311, 314 (Fla. 2003).
ARGUMENT
I. THIS COURT HAS AUTHORITY TO DETERMINE IF AN INVALID AGREEMENT WAS ENTERED BY FERRUZZA AND DURANGO
Durango argues this Court should not even determine if the parties entered into a valid arbitration agreement. Instead, Durango maintains an arbitrator should decide whether the arbitration agreement is unenforceable. This assertion completely contradicts precedent maintained by this Court and the Florida Supreme Court. This Court has previously determined “it is the court’s obligation, in deciding a motion to compel arbitration, to determine whether a valid written agreement to arbitrate exists.” SA-PG-Ocala, LLC. v. Stokes, 935 So. 2d 1242, 1243 (Fla. 5th DCA 2006).
Moreover, pursuant to federal statutes and Florida’s arbitration code, there are three elements for a court to consider when 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. See Terminix Int’l Co. L.P. v. Ponzio, 693 So. 2d 104, 106 (Fla. 5th DCA 1997); see also Seifert v. U.S. Home Corp., 750 So. 2d 633, 636 (Fla. 1999). The issue before the Court here relates to the first element as to whether a valid arbitration agreement existed. Thus, both federal courts and state courts have jurisdiction to determine the validity of an agreement to arbitrate and are not required to defer to the decision of an arbitrator.
II. TITLE VII OF THE CIVIL RIGHTS ACT OF 1964 AND THE FLORIDA CIVIL RIGHTS ACT ASSERT THE PREVAILING PARTY IS ENTITLED TO HAVE ATTORNEY’S FEES REIMBURSED.
The Florida Civil Rights Act contains a section addressing compensation for attorney’s fees. Florida Statutes Section 760.11(5) provides in pertinent part:
In any action or proceeding under this subsection, the court, in its discretion, may allow the prevailing party a reasonable attorney’s fee as part of the costs. It is the intent of the Legislature that this provision for attorney’s fees be interpreted in a manner consistent with federal case law involving a Title VII action.
Title VII of the Civil Rights Act of 1964 allows a prevailing plaintiff to recover attorney’s fees pursuant to 42 U.S.C. § 2000(e)-5(k).
It is clear the Florida Statutes and Title VII of the Civil Rights Act of 1964 allow the prevailing party to recover attorney’s fees. However, in this matter, the Agreement signed by both parties requires any dispute between Durango and Ferruzza arising out of the employment relationship shall be subject to binding arbitration. This statement functions with a later sentence in the Agreement, which mandates each party shall bear their own legal fees. Thus, even if Ferruzza was successful in arbitration against Durango, Ferruzza would not be afforded the same just compensation provided under the Florida Statutes and Title VII of the Civil Rights Act of 1964.
Under the Federal Arbitration Act, Federal law, and Florida law, the use of arbitration agreements is generally favored by the courts. See Global Travel Marketing, Inc. v. Shea, 908 So. 2d 392, 396 (Fla. 1999). However, the Federal Arbitration Act also states that an arbitration agreement may be ruled unenforceable “upon such grounds as exist at law or in equity for the revocation of any contract. 9 U.S.C. § 2 (2000). “It is well established that �a party does not forgo the substantive rights afforded by [a] statute [when she agrees to arbitrate a statutory claim but] only submits to their resolution in an arbitral, rather than judicial forum.” ’ Morrison v. Circuit City Stores, Inc., 317 F.3d 646, 670 (6th Cir. 2003) (quoting Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 26 (1991)) (quotation omitted). Moreover, the Florida Supreme Court has also cautioned “neither the statutes validating arbitration clauses nor favoring such provisions should be used as a shield to block a party’s access to a judicial forum in every case.” Seifert v. U.S. Home Corp., 750 So 2d at 642. The Agreement Ferruzza signed directly contradicts the rights afforded to her under the Florida Statutes and Title VII of the Civil Rights Act of 1964. Therefore, while arbitration is usually favored by the courts, it should not be mandated here to deprive Ferruzza of rights granted to her by Congress, the Florida Legislature, United States Constitution, Florida Constitution, United States Supreme Court and the Florida Supreme Court.
III. THE ENTIRE AGREEMENT IS UNENFORCEABLE BECAUSE THE AGREEMENT DID NOT PROVIDE FERRUZZA AN OPPORTUNITY TO RECOVER HER ENTITLED STATUTORY DAMAGES
Durango suggests a blue pencil should be taken to the sentence of the Agreement. (Appellant’s Initial Brief p. 13). The Circuit Court had authority and discretion to take a blue pencil to the last sentence of the Agreement. However, this Agreement does not include a severability clause. Therefore, merely taking a blue pencil to the last sentence is not feasible, and the Circuit Court correctly concluded that the entire Agreement was unenforceable. In any event, blue penciling a document is left to the sound discretion of the Circuit Court.
As this District Court has previously stated, “The presence of an unlawful provision in an arbitration agreement may serve to taint the entire arbitration agreement, rendering the agreement completely unenforceable.” Presidential Leasing, Inc. v. Krout, 896 So. 2d 938, 942 (Fla. 5th DCA 2005); see also Paladino v. Avnet Computer Technologies, Inc., 134 F.3d 1054, 1058 (11th Cir. 1998). The facts of Presidential Leasing, Inc., which this Court previously ruled upon, are surprisingly similar to the instant dispute. Krout sued Presidential Leasing, Inc. following a purchase of an automobile. Id. at 940. Presidential Leasing, Inc. moved to compel arbitration and stay the action pursuant to the purchase order agreement. Id. However, the purchase order required the purchaser to pay all the costs of the Dealer. Id.
Unlike the facts present in this case, the agreement signed by the parties in Presidential Leasing, Inc. did not address the prevailing party’s attorney’s fees; however, this Court held the requirement that Krout pay the costs of the Dealer frustrated the purpose of the Florida Deceptive and Unfair Trade Practices Act because the Act allows the prevailing party to recover attorney’s fees. Id. at 942. Moreover, this Court held the entire agreement unenforceable based on this one clause in dispute with Florida law and the agreement further requiring all disputes be submitted to arbitration and the agreement further mandating the purchaser to pay for the defendant’s costs. Presidential Leasing, Inc., 896 So. 2d at 942.
In the instant case, the Agreement clearly requires Ferruzza to bear her own costs. Moreover, much like Presidential Leasing, Inc. it forces her to submit any disputes to arbitration. The requirement of Ferruzza bearing all costs incurred is enough to taint the entire Agreement and render it unenforceable as guided by Presidential Leasing, Inc. Further, this Agreement does not contain a severability clause, and under Presidential Leasing, Inc., one unlawful provision may render the entire agreement unenforceable and not require the Court to blue line pencil the sentence as Appellant suggests.
CONCLUSION
Based upon the foregoing facts, law and argument of counsel, Appellee respectfully requests that the order denying Durango’s Motion to Compel Arbitration and Stay Action entered on August 13, 2008 be upheld by this Court.
___________________________
Maurice Arcadier, Esquire
Attorney for Appellee
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that the original and three copies of the foregoing has been sent by Federal Express to The District Court of Appeal of the Fifth District of Florida, 300 South Beach Street, Daytona Beach, Florida 32114. A copy has been sent by U.S. Mail to the Timothy W. Weber, Esquire, Battaglia, Ross, Dicus & Wein, P.A. 980 Tyrone Boulevard, Saint Petersburg, Florida 33710 on this 15th day of October, 2008.
Maurice Arcadier, Esquire
Florida Bar No. 131180
Arcadier and Associates
Attorneys for Employer/Appellant
2815 W New Haven, Suite 304
Melbourne, Florida 32904
Phone: (321) 953-5998
Fax: (321) 953-6075
CERTIFICATE OF COMPLAINCE
I HEREBY CERTIFY that the foregoing is in compliance with the font requirements of Florida Rule of Appellate Procedure 9.210.
___________________________
Maurice Arcadier, Esquire
Attorney for Appellee
Attorney:
Maurice Arcadier
Status:
Resolved
Date Filed:
October 2008
Our Melbourne office is centrally located in Brevard County, enabling our lawyers to serve clients throughout “the Space Coast”, including Cocoa Beach, Palm Bay and Vero Beach.
