Opinion
No. 1D23-8
08-09-2023
SICIS NORTH AMERICA, INC., Appellant, v. SADIE'S HIDEAWAY, LLC, Galvas Construction, Inc., a Florida corporation; A Boheme Design, LLC, Florida limited liability company; and Steel Windows & Doors, U.S.A., LLC, a Connecticut limited liability company, Appellees.
Daniel Nordby of Shutts & Bowen LLP, Tallahassee; Matthew S. Sackel, Sean M. Smith, and Michael Muñoz of Shutts & Bowen LLP, West Palm Beach, for Appellant. Michelle L. Hendrix of Vernis & Bowling of Northwest Florida, P.A, Pensacola, for Appellee Galvas Construction, Inc.; Stuart C. Poage and William D. Horgan of Pennington, P.A., Tallahassee, for Appellee Sadie's Hideaway, LLC.
Daniel Nordby of Shutts & Bowen LLP, Tallahassee; Matthew S. Sackel, Sean M. Smith, and Michael Muñoz of Shutts & Bowen LLP, West Palm Beach, for Appellant.
Michelle L. Hendrix of Vernis & Bowling of Northwest Florida, P.A, Pensacola, for Appellee Galvas Construction, Inc.; Stuart C. Poage and William D. Horgan of Pennington, P.A., Tallahassee, for Appellee Sadie's Hideaway, LLC.
Lewis, J.
Appellant, SICIS North America, Inc., a tile manufacturer, appeals an order denying its motion to compel arbitration of the claims filed against it by Appellees, Sadie's Hideaway, LLC ("Sadie's") and Galvas Construction, Inc. ("Galvas"), Sadie's general contractor. Appellant contends that Sadie's is bound by the arbitration provision Galvas agreed to when purchasing the tiles used in Sadie's construction project because Sadie's based its claims upon Appellant's warranty and Galvas was acting as Sadie's agent when it purchased the tiles from Appellant. For the reasons that follow, we agree and, therefore, reverse the order as to Sadie's claims and remand with instructions that the trial court grant the motion. As for the trial court's denial of arbitration on the indemnification claim filed by Galvas against Appellant, we vacate the order denying the motion to compel arbitration on that claim because Galvas voluntarily dismissed it after the order was issued.
Factual Background
In Sadie's Second Amended Complaint against Appellant, Galvas, the project's architect, and a window and door company, Sadie's alleged that as part of Galvas's construction of its property, Appellant's tiles were purchased by Galvas, its subcontractors, or the design professionals for use in and around the exterior swimming pool, hot tub, pool deck water feature, and balcony. After construction was completed, Sadie's allegedly discovered several construction defects. Sadie's sued Galvas for breach of contract for construction defects, breach of express warranty, breach of implied warranty, negligence, Florida Building Code violations, and breach of contract for insurance premiums. Sadie's filed claims of negligence/products liability, breach of express warranty, breach of implied warranty, and negligent misrepresentation against Appellant. In its breach of express warranty claim, Sadie's alleged in part, "Under its Terms and Conditions of Sale documentation provided by [Appellant] to its product purchasers and third-party beneficiaries, [Appellant] made various warranties," including that its products would be free from defects. Sadie's asserted that it was entitled to enforce Appellant's warranties as the homeowner and subsequent purchaser of the tiles.
Sadie's attached to its Second Amended Complaint its agreement with Galvas as well as an unsigned copy of Appellant's Terms and Conditions of Sale and Limited Warranty in which Appellant and its tile purchasers agreed to arbitrate any adversarial disputes, controversies, and claims. The warranty extended to "Buyer and to a purchaser of Products from [Appellant's] authorized distributer or retailer, and to those persons who, under applicable state law, are entitled to rely hereon as third party beneficiaries (each a ‘Subsequent Purchaser’)."
Galvas filed a cross-claim against Appellant for indemnification, claiming that its liability to Sadie's was "solely vicarious from the allegedly defective materials provided by [Appellant]." It further alleged that "there existed a special relationship between [it] and [Appellant] because [Appellant] provided certain materials to [it] for it to install on the Project ...."
In its Motion to Compel Arbitration and to Stay Action, Appellant requested that the trial court compel both Sadie's and Galvas to arbitrate their claims against it. Appellant contended that Sadie's four claims "all fall within the broad scope of an arbitration provision contained within [its] warranty documents under which [Sadie's] has brought suit" and that Galvas's indemnification claim arose from the companies’ alleged transaction. During the hearing on the motion, Galvas's attorney argued against the motion to compel while relying in part upon the fact that the terms and conditions documents attached to Sadie's Second Amended Complaint were unsigned.
The trial court denied the motion to compel, stating in part, "Having had a chance to review the case authorities that were cited, I'm going to deny the motion to compel at this time.... I don't know at this point whether counsel can produce a signed document or not. So ... there may be some additional argument now that the Court has made this ruling that the parties want to raise again in the future." In its written order denying the motion, the trial court relied upon its reasons stated on the record.
Thereafter, Appellant moved for reconsideration and clarification of the trial court's order. Appellant attached to its motion a copy of its Terms and Conditions of Sale and Limited Warranty that was signed by Galvas, along with the affidavit of one of its representatives, who claimed that the signed warranty was kept within Appellant's business records and had been received from Galvas via facsimile. Appellant argued that Sadie's was bound by the arbitration provision contained in Galvas's purchase agreement because Galvas acted as Sadie's agent in acquiring the tiles.
In the Order on Defendant's Motion for Reconsideration and Clarification of Order Denying Motion to Compel Arbitration and Stay Action, the trial court set forth in part:
2. [Appellant] ... a Delaware corporation, filed a motion to compel arbitration pursuant to a written agreement [Appellant] has with a co-defendant. While [Sadie's] filed, among others, a claim based upon written warranty as to [Appellant],
[Sadie's] is not in privity with [Appellant].
3. Accordingly, there is no agreement for [Sadie's] to be bound by an arbitration provision in [Appellant's] agreement executed by a co-defendant where [Sadie's] is not a signatory. [Sadie's] has alleged other causes [ ] of action against [Appellant] which are not based upon [Appellant's] written agreement with co-defendant(s). Accordingly, the Court finds that [Sadie's] is not bound by the arbitration agreement attached to [Appellant's] motion to reconsider.
For these reasons, the trial court denied the motion.
In January 2023, Appellant filed its notice of appeal and its initial brief. In February 2023, Sadie's filed a notice of dismissal as to its express warranty claim, and Galvas filed a notice of dismissal as to its indemnification claim against Appellant.
Analysis
When addressing an arbitration issue, we review a trial court's factual findings for competent, substantial evidence but its construction of an arbitration agreement and its application of the law to the facts de novo. CEFCO v. Odom , 278 So. 3d 347, 351 (Fla. 1st DCA 2019). Under the Federal Arbitration Act as well as the Florida Arbitration Code, the three elements for courts to consider in ruling on a motion to compel arbitration are: (1) whether a valid written agreement to arbitrate exists; (2) whether an arbitrable issue exists; and (3) whether the right to arbitrate was waived. Id.
As the parties acknowledge, it is the first element, i.e. , whether Sadie's is subject to a valid arbitration agreement, that is at issue in this case. It is important to consider that when this matter was decided by the trial court, both during the hearing on the motion to compel arbitration and when ruling on the motion for reconsideration and clarification, Sadie's had not yet dismissed its breach of express warranty claim. Nor had Galvas dismissed its indemnification claim against Appellant. Although it appears that the trial court denied Appellant's arbitration motion, at least in part, on the fact that the Terms and Conditions of Sale and Limited Warranty attached to the Second Amended Complaint were not signed, Appellant subsequently filed a signed copy of such with the trial court. Yet, the trial court denied the motion for reconsideration and clarification on the basis that Sadie's was not a signatory to the agreement. This was error for two reasons.
First, because Sadie's was suing Appellant based upon the written warranty, it was bound by the arbitration provision contained in Galvas's agreement with Appellant. As the Florida Supreme Court has explained, "[W]hen a plaintiff sues under a contract to which the plaintiff is not a party ... we will ordinarily enforce an arbitration clause contained in that contract, absent some other valid defense...." Mendez v. Hampton Court Nursing Ctr., LLC , 203 So. 3d 146, 149 (Fla. 2016). Sadie's had no valid defense against arbitration, a fact which it apparently realized when it voluntarily dismissed its express warranty claim after the notice of appeal and initial brief were filed.
Second, the trial court erred in not compelling arbitration based upon the agency relationship that existed between Sadie's and Galvas. The essential elements of an actual agency relationship are: (1) acknowledgement by the principal that the agent will act for him; (2) the agent's acceptance of the undertaking; and (3) control by the principal over the actions of the agent. Villazon v. Prudential Health Care Plan, Inc. , 843 So. 2d 842, 856, n.10 (Fla. 2003). As it did below, Appellant cites on appeal Dye v. Tamko Building Products, Inc. , 275 F. Supp. 3d 1314, 1316 (M.D. Fla. 2017), where the defendants moved to compel arbitration on the disputes concerning their allegedly defective shingles; the claims raised included breach of express warranty, strict products liability, design defect, manufacturing defect, failure to warn, negligence, negligent misrepresentation, and a deceptive and unfair trade practices claim. The plaintiffs argued that they were not required to arbitrate their disputes because no binding arbitration agreement existed between the parties. Id. The district court noted that each package of shingles contained a thirty-year limited warranty that included an arbitration provision. Id. Defendant Tamko argued that the arbitration clause was valid and enforceable against the plaintiffs notwithstanding that the shingles were purchased by the plaintiffs’ roofers and not the plaintiffs personally. Id. at 1318. It further argued that the plaintiffs could not seek to avoid arbitration provisions contained in the same agreement they sought to enforce. Id.
The district court found Mendez distinguishable because the supreme court did not determine whether agency principles applied to bind a non-signatory to the arbitration agreement at issue. Id. at 1319. The district court reasoned that it "must determine whether, under the Florida law, the roofers were acting as Plaintiffs’ agents when they purchased and opened the Shingles on Plaintiffs’ behalf and installed the Shingles on [their] roofs." Id. at 1321. The district court affirmatively answered that question and rejected the plaintiffs’ argument that they never gave the roofers the authority to bind them to any arbitration provision because in "authorizing the roofers as their agents concerning their roofing projects, it was unnecessary for Plaintiffs to provide them additional or expressed permission to enter into the arbitration agreement provided that the purchase of the Shingles was within the scope of the work the roofers were hired to do." Id. at 1322. The district court concluded that the arbitration agreement encompassed the claims in the case. Id. ; see also Fi-Evergreen Woods, LLC v. Est. of Robinson , 172 So. 3d 493, 495 (Fla. 5th DCA 2015) ("[A] non-signatory to an arbitration agreement is bound to the agreement ‘when the signatory ... is authorized to act as the agent of the person sought to be bound.’ ") (citation omitted).
Here, as in Dye , the record evidence establishes that Sadie's authorized Galvas as its general contractor to act as its agent when purchasing the tiles from Appellant. Article 3 of the parties’ agreement provides that Galvas "accept[ed] the relationship of trust and confidence established by the [a]greement," it would "exercise [its] skill and judgment in furthering the interests of the Owner," it would "furnish efficient business administration and supervision," and it would "furnish at all times an adequate supply of workers and materials." Section 10.1 authorizes Galvas to obtain bids from "suppliers of materials," and Section 12.1.9 provides that "the Contractor will not be required to make payments to subcontractors or suppliers unless and until the Owner pays Contractor for their work and materials." In line with its duties pursuant to the agreement, Galvas alleged below in its indemnification claim that a special relationship existed between it and Appellant because Appellant provided "certain materials" to it to install on the project. In addition, Appellant filed with the trial court a signed copy of its purchase agreement with Galvas. Because Galvas's purchase of the tiles was within the scope of work that Sadie's hired it to do, it was unnecessary for Sadie's to expressly authorize Galvas to enter into the arbitration agreement with Appellant. Sadie's is bound by that agreement by virtue of its agency relationship with Galvas.
Accordingly, we reverse the order denying the motion to compel arbitration as to Sadie's claims and remand with instructions that the trial court grant the motion and refer the claims to arbitration. The order is vacated as to Galvas's now-dismissed indemnification claim.
REVERSED in part; VACATED in part; and REMANDED with instructions.
M.K. Thomas and Long, JJ., concur.