Law and Arbitration Offices of Donald T Ryce

Although often it is obvious that a particular controversy is arbitrable under the arbitration agreement between the parties, at times the matter is not absolutely clear.  In Florida, typically this issue is raised in the context of a motion to compel arbitration, when the court is required to determine, inter alia, whether an arbitrable issue exists. In deciding whether an arbitration clause covers a particular type of dispute, the court must discern the intent of the parties by examining the language of the agreement.  Episcopal Diocese of Cent. Fla. v. Prudential Secs., Inc., 925 So.2d 1112, 1115 (Fla. 5^th DCA 2006).

            This question probably arises most often when the dispute is over whether an arbitration agreement covers a particular tort claim as well as a breach of contract claim.  The leading Florida case addressing this issue is Seifert v. U.S. Home Corp., 750 So.2d 633, 636 (Fla.1999), in which the court held that the appropriate test was whether “the tort claim, as alleged in the complaint, arises from and bears such a significant relationship to the contract between the parties as to mandate application of the arbitration clause.” Id. at 640.  In other words, a court must compare the contract containing the arbitration clause to the allegations of the complaint to see if there exists a “sufficient nexus” between the two.  In Seifert, the Florida Supreme Court concluded that the tort claim in that case did not have a sufficient relationship to the agreement so as to require submission of the cause to arbitration, because none of the plaintiff’s allegations asserted that the defendant’s duties or obligations arose from or were governed by the contract.  On the other hand, in a recent case the court held that a claim for breach of fiduciary duty by a company against its former CEO was arbitrable under the employment agreement’s arbitration clause, because it was necessary to examine the contract to ascertain exactly what the CEO’s duties to the company were.  Burke v. Windjammer Barefoot Cruises, --- So.2d ----, 2008 WL 239071 (Fla.3^rd DCA).