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Date: 07-16-2022
Case Style:
UniFirst Corporation vs. Stronger Collision Center, LLC
Case Number: No. 3D21-0281 Lower Tribunal Nos. 20-245 AP, 20-615 CC
Judge:
Alexander S. Bokor
Court:
Third District Court of Appeal State of Florida
On Appeal From The County Court for Miami-Dade County
Stephanie
Silver,
Judge
Plaintiff's Attorney:
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Defendant's Attorney: Law Office of Keith Chasin, and Keith Chasin
Description:
Miami, Florida - Arbitration lawyer represented Appellant with appealing the dismissal of their claim seeking enforcement of an arbitral award.
UniFirst Corporation appeals the trial court’s grant of Stronger
Collision’s motion to dismiss UniFirst’s claim seeking enforcement of an
arbitral award.
1 The issue turns on whether the applicable law and the terms
of the parties’ contract permitted UniFirst to proceed with an ex parte
arbitration after Stronger Collision elected not to participate or whether
UniFirst should have first sought a court order to compel arbitration before
proceeding.2
As explained below, under the contract’s choice of New York
law, we conclude that UniFirst appropriately proceeded to arbitration.
UniFirst and Stronger Collision entered into a contract with an
arbitration provision and a selection of New York law.3
Subsequently,
1 As the order on appeal not only grants a motion to dismiss but also denies
the substantive relief sought by UniFirst, the plaintiff below, we have
jurisdiction as an appeal of a final order. Fla. R. App. P. 9.030(b)(1)(A); see
also Hoffman v. Hall, 817 So. 2d 1057, 1058 (Fla. 1st DCA 2002) (“The
traditional test for finality is whether the decree disposes of the cause on its
merits leaving no questions open for judicial determination except for
execution and enforcement of the decree if necessary.”). 2 We review issues of law and issues of contract interpretation de novo. All
Seasons Condo. Ass'n, Inc. v. Patrician Hotel, LLC, 274 So. 3d 438, 445
(Fla. 3d DCA 2019) (“[T]he interpretation of a contract involves a pure
question of law that is subject to a de novo standard of review.”). 3 The arbitration provision at issue reads as follows:
All disputes of whatever kind between Customer and UniFirst
based upon past, present or future acts, whether known or
unknown, and arising out of or relating to the negotiation or
performance of this Agreement shall be resolved exclusively by
final and binding arbitration. The arbitration shall be conducted
in the capital city of the state where Customer has its principal
3
UniFirst demanded arbitration, which Stronger Collision refused. UniFirst did
not seek to compel arbitration. Instead, UniFirst proceeded to arbitration in
Tallahassee, Florida, under the expedited procedures of the commercial
arbitration rules of the American Arbitration Association (AAA), in
accordance with the contract. Stronger Collision timely received notice of
this proceeding, but did not participate.
After an ex parte arbitration under the expedited AAA procedures, the
arbitrator issued an award in UniFirst’s favor. UniFirst sought enforcement
of that award in a court of competent jurisdiction in Miami-Dade County.
place of business (or some other location mutually agreed to by
Customer and Unifirst) pursuant to the Expedited Procedures of
the Commercial Arbitration Rules of the American Arbitration
Association and shall be governed by the Federal Arbitration Act.
Customer acknowledges that, with respect to all such disputes,
it has voluntarily and knowingly waived any right it may have to
a jury trial or to participate in a class action or class litigation as
a representative of any other persons or as a member of any
class of persons, or to consolidate its claims with those of any
other persons or class of persons. If this prohibition against class
litigation is ruled to be unenforceable for any reason in any
proceeding, then prohibition against class litigation shall be void
and of no force and effect in that proceeding. This paragraph is
governed by New York Law (exclusive of choice of law). The
arbitrators shall award to the substantially prevailing party, if any,
as determined by the arbitrators, all of its costs and fees. “Costs
and fees” are defined as all reasonable pre-award expenses of
the arbitration, including the arbitrators’ fees, administrative
costs, travel expenses, out-of-pocket expenses, such as copying
and telephone expenses, court costs, witness fees and attorney
fees.
4
Stronger Collision contested the award, arguing, among other grounds, that
UniFirst’s ex parte award cannot be enforced because of the failure to first
seek an order compelling arbitration. The trial court agreed, applying Florida
law to conclude that the arbitration provision required UniFirst to first seek a
court order compelling arbitration prior to arbitrating its dispute, ex parte,
under the agreed-to arbitration rules.
This was error, as UniFirst complied with the applicable New York law
and the expedited procedures under the commercial arbitration rules of the
AAA as elected in the parties’ contract. The parties do not dispute that the
arbitration provision is “governed by New York Law” as the exclusive choice
of law. Choice-of-law provisions in Florida are presumptively valid and must
be enforced unless strong public policy considerations warrant invalidating a
contracting party’s choice to be bound by the laws of another state. See,
e.g., Se. Floating Docks, Inc. v. Auto-Owners Ins. Co., 82 So. 3d 73, 80 (Fla.
2012). Further, “[w]here the language of the contract clearly indicates that
AAA rules govern, they are expressly incorporated into the contract.”
Younessi v. Recovery Racing, LLC, 88 So. 3d 364, 365 (Fla. 4th DCA 2012).
5
Thus, we apply New York law and the AAA rules to determine UniFirst’s
entitlement to ex parte arbitration under the contract.4
The relevant AAA rule permits ex parte arbitration if the respondent
does not reply to arbitration notices, as was the case here.5 New York law
also provides that “[a] party aggrieved by the failure of another to arbitrate
may apply for an order compelling arbitration.” N.Y. C.P.L.R. 7503(a)
(emphasis added). “May” is a permissive term. Nothing in the use of the
language “may apply for an order compelling arbitration” mandates that a
party must apply for such an order before seeking arbitration under the
4 Although we apply New York law, Stronger Collision also argues that
binding caselaw from this court prohibits the enforcement of such an award
obtained after ex parte arbitration. See Chicago Ins. Co. v. Tarr, 638 So. 2d
106, 107 (Fla. 3d DCA 1994) (“Ex parte arbitration awards will not be
enforced unless the insurance policy provides for ex parte arbitration.”).
Stronger Collision’s reliance on Tarr is misplaced. First, the defendant in
Tarr was not a party to the arbitration sought. Id. (“Chicago was not made a
party to the arbitration.”). Second, unlike the insurance policy in Tarr, which
did not provide for ex parte arbitration, the agreement in this case clearly
states that arbitration shall be governed by the commercial arbitration rules
of the AAA, which do provide for ex parte arbitration. Here, Stronger
Collision was both a party to the arbitration agreement which provided for ex
parte arbitration, and UniFirst specifically demanded arbitration with Stronger
Collision. UniFirst sought ex parte arbitration, as permitted under the rules,
only after Stronger Collision refused the demand to arbitrate.
5 See American Arbitration Association, Commercial Arbitration Rules and
Mediation Procedures, R-31 (Oct. 1, 2013),
https://adr.org/sites/default/files/Commercial%20Rules.pdf (“Unless the law
provides to the contrary, the arbitration may proceed in the absence of any
party or representative who, after due notice, fails to be present or fails to
obtain a postponement.”).
6
procedures agreed to by the parties. See, e.g., In re Cnty. of Suffolk v.
Suffolk Chapter, Civ. Serv. Emps. Ass'n, Inc., Loc. No. 852, 86 A.D.2d 892,
892 (N.Y. App. Div. 1982) (reversing the trial court’s vacation of an arbitration
award and explaining that “filing of the notice of intent, while advisable, is not
mandatory in light of the use of the permissive ‘may’”).
Here, Stronger Collision elected not to participate in the arbitration after
receiving UniFirst’s demand. UniFirst was, therefore, within its rights under
New York law to file a demand for arbitration with the AAA without first
exercising its permissive option to seek a court order compelling arbitration.
The rules agreed to by the parties do not require a court order to compel
arbitration and explicitly permit ex parte arbitration where not prohibited by
law. Accordingly, UniFirst complied with New York law and the contractual
language (incorporating AAA expedited procedures) before seeking and
obtaining an arbitral award.
Outcome: The trial court erred in dismissing the petition to
enforce the arbitral award on that basis.
Reversed and remanded
Plaintiff's Experts:
Defendant's Experts:
Comments: