Third District Court of Appeal
State of Florida
Opinion filed February 1, 2017.
Not final until disposition of timely filed motion for rehearing.
________________
No. 3D15-1985
Lower Tribunal No. 12-19578
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Kendall Imports, LLC, etc.,
Appellant,
vs.
Dianellys Y. Diaz, et al.,
Appellees.
An Appeal from a non-final order from the Circuit Court for Miami-Dade
County, Jose M. Rodriguez, Judge.
Akerman LLP, and Christopher S. Carver, Lawrence D. Silverman, and
Lorayne Perez, for appellant.
Dorta Law, and Gonzalo R. Dorta, Matias R. Dorta, and Craig A.
Applebaum, for appellees.
Before ROTHENBERG, EMAS, and FERNANDEZ, JJ.
ROTHENBERG, J.
FACTS AND PROCEDURAL HISTORY
Kendall Imports, LLC (“Kendall”) sold automobiles to Dayron Ortega
(“Ortega”), Erislandis Marquez (“Marquez”), and Dianellys Y. Diaz (“Diaz”)
(collectively, “the Buyers”). The Buyers do not speak or read English. When the
Buyers purchased their vehicles, they each signed two documents that were written
in English—a purchase order (“purchase order”) and a retail installment sales
contract (“financing agreement”) (collectively, “the documents”). Both the
purchase order and the financing agreement contained arbitration clauses, but they
were not identical.
The Buyers filed a class action lawsuit against Kendall and its finance
director, seeking damages and alleging violations of the Florida Deceptive and
Unfair Trade Practices Act (“FDUTPA”), violations of the Motor Vehicle Retail
Sales Finance Act, and unjust enrichment. Specifically, the Buyers alleged that
after they signed the purchase order and financing agreement, Kendall filled in the
blank spaces in these documents with extra fees and products without informing
the Buyers or obtaining their consent.
Kendall filed a motion to compel arbitration based on the arbitration clauses
in the purchase order and financing agreement. At the evidentiary hearing
conducted on Kendall’s motion to compel, there was no evidence presented that
the Buyers were rushed or pressured into signing the documents, sought help in
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translating the documents, or asked Kendall to clarify the terms of the arbitration
clauses.
Following the evidentiary hearing, the trial court entered a non-final order,
finding that the only discussions the sales staff had with the Buyers related to the
financial terms, such as the purchase price and the monthly payments. Despite the
Buyers’ inability to speak or read English, Kendall did not attempt to explain the
terms of the documents to the Buyers or inform them of the arbitration provisions
in the documents. Moreover, the trial court found that the arbitration provisions in
the purchase order and financing agreement conflict, and even if they had been
written in Spanish, a reasonable person reading these documents would not have
had a clear understanding of the precise terms and conditions needed to form a
mutual agreement to arbitrate. Based on these findings, the trial court denied
Kendall’s motion to compel arbitration on two alternative grounds: (1) due to the
conflicts between several of the provisions within the arbitration clauses in the
purchase order and the financing agreement, Kendall and the Buyers did not have
“a meeting of the minds” regarding an agreement to arbitrate and thus there was no
valid agreement to arbitrate as a matter of law; and (2) even if the arbitration
clauses were validly formed, they were unconscionable. Kendall timely appealed
the trial court’s non-final order.
ANALYSIS
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I. Standard of Review
The trial court’s entry of an order denying a motion to compel arbitration
“presents a mixed question of law and fact.” Fonte v. AT&T Wireless Servs., Inc.,
903 So. 2d 1019, 1023 (Fla. 4th DCA 2005) (citing Gainesville Health Care Ctr.,
Inc. v. Weston, 857 So. 2d 278, 283 (Fla. 1st DCA 2003)). We review the trial
court’s legal determinations and interpretations of contracts de novo, Basulto v.
Hialeah Auto., 141 So. 3d 1145, 1153 (Fla. 2014); Royal Palm Hotel Prop., LLC v.
Deutsche Lufthansa Aktiengesellschaft, Inc., 133 So. 3d 1108, 1110 (Fla. 3d DCA
2014), and presume that the trial court’s findings of fact are correct unless they are
clearly erroneous. See Basulto, 141 So. 3d at 1155.
“[T]here are three elements for courts to consider in 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.” Seifert v. U.S. Home Corp., 750 So. 2d 633, 636 (Fla.
1999). Only the first element—whether the parties formed a valid written
agreement to arbitrate through the execution of the documents—is in dispute in the
instant case.
II. Whether a valid written agreement to arbitrate exists
As stated above, the trial court made several findings of fact, and based on
those findings, it concluded as a matter of law that the parties did not form a valid
4
agreement to arbitrate. As a threshold matter, we note that there is no dispute as to
any of the trial court’s factual findings except for the finding that, due to the
conflicts between the arbitration provisions, no reasonable person would have
understood that they were agreeing to arbitrate in the event of a dispute. In addition
to the dispute as to this factual determination, the trial court’s other factual findings
are relevant based on the facts of this case. Therefore, because the initial factual
findings are relevant to the issue of formation and may have influenced the trial
court’s analysis, we address those findings first.
A. The relevance of the Buyers’ inability to read or write English
The trial court found, inter alia, that there was no agreement to arbitrate
because the Buyers could not effectively communicate in English, and there was
no evidence that anyone attempted to explain the documents, and specifically, the
conflicting arbitration provisions to the plaintiffs. The trial court then likened the
instant case to the “Basulto” case which generated a circuit court order
memorialized in Basulto v. Hialeah Auto., L.L.C., 2007 WL 6623887 (Fla. Cir. Ct.
2007) (“Basulto I”); an opinion by this Court reviewing Basulto I, Hialeah Auto.,
LLC v. Basulto, 22 So. 3d 586 (Fla. 3d DCA 2009) (“Basulto II”); and an opinion
by the Florida Supreme Court, Basulto v. Hialeah Auto., 141 So. 3d 1145 (Fla.
2014) (“Basulto III”). A review of the trial court’s findings in Basulto I and the
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Florida Supreme Court’s opinion in Basulto III, however, demonstrates that the
trial court’s and the Buyers’ reliance on “Basulto” is misplaced.
In Basulto I, the trial court found that the plaintiffs in that case did not
speak, read, or write English; the documents presented to them were all in English;
they were rushed into signing the documents; they were not given an opportunity
to ask any questions; Potamkin’s employees took it upon themselves “to explain
everything to the plaintiffs” but either failed to explain the arbitration provisions or
lacked a sufficient understanding to explain the arbitration provisions to the
plaintiffs; the plaintiffs signed the documents which contained conditions that
differed from what they were told were in the documents; and the dispute
resolution provisions within the documents were inconsistent and irreconcilable.
Based on these findings of fact, the trial court found that, as a matter of law, there
was no meeting of the minds and thus there was no valid agreement to arbitrate.
In Basulto III, the Florida Supreme Court, citing to Tobin v. Michigan
Mutual Insurance Co., 948 So. 2d 692, 696 (Fla. 2006), held that the trial court’s
factual findings are presumptively correct and must be upheld unless clearly
erroneous. Basulto III, 141 So. 3d at 1155-56. The Court then held that the trial
court’s factual findings, as articulated above, were supported by the record. Id. at
1156. Lastly, the Court considered whether these factual findings supported the
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trial court’s legal determination that there was no meeting of the minds and thus no
valid formation of an agreement to arbitrate. Id. at 1156.
In reaching the conclusion that the record supported the trial court’s
determination that there was no meeting of the minds, such that an enforceable
agreement to arbitrate did not exist, the Florida Supreme Court specifically relied
on its decision in Pepple v. Rogers, 140 So. 205, 208 (1932), and included in its
reference to Pepple the following parenthetical:
The general rule is that in order for a misrepresentation to be ground
for rescission and cancellation, it must be with reference to some
material fact or thing, unknown to the complainant, either from his not
having examined, or for want of opportunity to be informed, or from
his entire confidence reposed in the defendant . . . .
Basulto III, 141 So. 3d at 1156. From the specific inclusion of this parenthetical in
its holding that the trial court’s finding that there was no meeting of the minds was
supported by the record, it is clear that the Florida Supreme Court’s holding was
premised, at least in part, by the misrepresentations made by Potamkin’s
employees to the plaintiffs.
The trial court’s reliance on “Basulto” in the instant case is misplaced
because the facts in the instant case are totally dissimilar. In fact, the only fact the
instant case shares with “Basulto” is that the Buyers could not read or write
English and the forms they signed were in English. There is absolutely no evidence
in the record before this Court that the Buyers in the instant case were rushed,
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pressured, or coerced into signing the documents; that they were not given an
opportunity to ask questions or seek assistance in interpreting the documents; or
that they even attempted to understand what they were signing. Kendall’s
employees did not take it upon themselves “to explain everything to the plaintiffs,”
omit discussing the arbitration provisions, incorrectly explain what these
provisions meant, or misrepresent the effect of these provisions.
Rather, the Buyers in the instant case have admitted that they signed the
documents in question without attempting to read them or learn what they were
agreeing to, with the exception of the financial terms, such as the costs, monthly
payments, etc. They did not tell anyone they could not read the documents they
were signing because they did not speak or read English, and there is no evidence
that Kendall’s employees were even aware that the Buyers could not and did not
read the documents. In fact the financial agreement specifically provided the
following statement directly above the Buyers’ signature line:
You agree to the terms of this contract. You confirm that before you
signed this contract, we gave it to you, and you were free to take it
and review it. You acknowledge that you have read both sides of this
contract, including the arbitration clause on the reverse side, before
signing below. You confirm that you received a completely filled-in
copy when you signed it.
We, therefore, conclude that “Basulto” does not control the analysis, and thus we
apply the general and longstanding legal principles regarding contract formation.
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We begin that analysis with the well-established principle that one who
signs a contract is generally bound by the contract. In Allied Van Lines, Inc. v.
Bratton, 351 So. 2d 344, 347-48 (Fla. 1977), the Florida Supreme Court articulated
this principle of law in no uncertain terms:
It has long been held in Florida that one is bound by his contract.
Unless one can show facts and circumstances to demonstrate that he
was prevented from reading the contract, or that he was induced by
statements of the other party to refrain from reading the contract, it is
binding. No party to a written contract in this state can defend against
its enforcement on the sole ground that he signed it without reading it.
See also Spring Lake NC, LLC v. Holloway, 110 So. 3d 916, 917 (Fla 2d DCA
2013) (finding that although Ms. Holloway was 92 years old, had a fourth-grade
education, could not spell, often had to sound out words while reading, had
memory problems, was increasingly confused, and she “could not possibly have
understood what she was signing” when she signed a financial agreement
containing an arbitration agreement, she was nevertheless bound by the agreement
where there was no evidence that the admissions staff at Spring Lake used any
improper methods to obtain her signature or misled her, and that “[f]or better or
worse, her limited abilities are not a basis to prevent the enforceability of this
contract”); Rocky Creek Ret. Props, Inc. v. Estate of Fox, 19 So. 3d 1105, 1108
(Fla. 2d DCA 2009) (holding that a party is generally bound by a contract the party
signs unless he was prevented from reading the contract or induced by the other
party to refrain from reading it, and “[t]his is true whether a party is physically
9
unable to read the agreement, or simply chooses not to read the agreement”)
(internal citation omitted); Estate of Etting ex rel. Etting v. Regents Park at
Aventura, Inc., 891 So. 2d 558, 558 (Fla. 3d DCA 2004) (affirming an order
compelling arbitration even though the party contesting arbitration was legally
blind at the time she signed the agreement containing the arbitration clause).
In Merrill, Lynch, Pierce, Fenner & Smith, Inc. v. Benton, 467 So. 2d 311,
313 (Fla. 5th DCA 1985), the Fifth District Court of Appeal held;
Persons not capable of reading English, as well as those who are, are
free to elect to bind themselves to contract terms they sign without
reading. . . . The burden is on the person who cannot read to know that
he cannot read and if he desires to have an instrument read and
explained to him to select a reliable person to do so before he signs it.
Thus, the Fifth District concluded that although the brokerage firm’s employee was
allegedly aware that Ms. Benton could not read English, the fact the employee did
not read or explain the contractual documents, which contained an arbitration
clause, to Ms. Benton was insufficient to invalidate the documents or to constitute
a defense to them, where Ms. Benton did not allege or testify that the firm
prevented her from reading the documents, induced her to refrain from reading
them, or prevented her from having them read to her by a reliable person of her
choice. Id. at 311.
This Court was presented with a similar situation in Rivero v. Rivero, 963
So. 2d 934, 938 (Fla. 3d DCA 2007), wherein the former wife sought to avoid
10
certain provisions in an executed marital settlement agreement based on her claim
that because she did not speak, read, or write English, she did not understand the
terms of the agreement, which were written in English. In rejecting Ms. Rivero’s
argument, this Court relied on Benton, specifically citing to the following quote:
The rule that one who signs a contract is presumed to know its
contents has been applied even to contracts of illiterate persons on the
ground that if such persons are unable to read, they are negligent if
they fail to have the contract read to them. If a person cannot read the
instrument, it is as much his duty to procure some reliable person to
read and explain it to him, before he signs it, as it would be to read it
before he signed it if he were able to do so.
Rivero, 963 So. 2d at 938 (quoting Benton, 467 So. 2d at 313) (quoting Sutton v.
Crane, 101 So. 2d 823, 825 (Fla. 2d DCA 1958) (quoting 12 Am. Jur. Contracts §
137))); see also Keller v. Reed, 603 So. 2d 717, 720 (Fla. 2d DCA 1992) (holding
that “parties to a written instrument have a duty to learn and understand the
contents of that instrument before signing it”).
Applying the law to the facts of the case before us, we conclude as follows.
Although the Buyers contend that they could not read the purchase order or the
financing agreement because they were in English and they could not read English,
the burden squarely rested on the Buyers to seek clarification of the terms of these
documents. The Buyers, however, failed to ask about the terms of the documents
they were signing, and nothing in the record suggests that Kendall misrepresented
the terms or prevented the Buyers from reading the documents. Instead, the Buyers
11
blindly signed the purchase order and the financial agreement, willfully agreeing to
whatever the terms were. Therefore, we find that the trial court erred as a matter of
law by invalidating the arbitration agreement on this basis.
B. Whether the alleged conflicts between the arbitration provisions
contained in the purchase order and the financing agreement
affected the Buyers’ ability to understand the terms.
The Buyers contend, and the trial court found, that the arbitration provisions
contained in the documents are unenforceable because the terms and conditions of
the arbitration agreements “are in direct conflict with one another” and these
conflicts “are irreconcilable.” Of most concern to the trial court was the alleged
conflicts as to the dispute resolution terms, although the trial court, in conclusory
fashion and without elaboration, also listed several other perceived conflicts:
choice of law, rights of appeal, costs of arbitration, attorney fees, location of
arbitration, delegation of issues, and class actions.
We begin our analysis by reiterating basic principles of law relevant here.
First, it is well-settled law that a single term in an arbitration clause cannot be
interpreted in isolation, but must be read together with the rest of the contract. Bari
Builders, Inc. v. Hovstone Props. Fla., LLC, 155 So. 3d 1160, 1162 (Fla. 4th DCA
2014) (“The arbitration clause must be read together with the other provisions in
the contract.”); Phoenix Motor Co. v. Desert Diamond Players Club, Inc., 144 So.
3d 694, 696 (Fla. 4th DCA 2014) (“Where two or more documents are executed by
12
the same parties, at or near the same time, in the course of the same transaction,
and concern the same subject matter, they will be read and construed together.”)
(quoting Collins v. Citrus Nat’l Bank, 641 So. 2d 458, 459 (Fla. 5th DCA 1994))
(emphasis added). Importantly, the presence of additional dispute resolution
provisions will not, per se, create an irreconcilable conflict if the terms can be read
in a complementary fashion. See Bari Builders, 155 So. 3d at 1162.
“A primary rule of contract construction is that where provisions in an
agreement appear to conflict, they should be construed so as to be reconciled, if
possible.” Arthur Rutenberg Corp. v. Pasin, 506 So. 2d 33, 34 (Fla. 4th DCA
1987). Thus, where the two arbitration clauses appear to be in conflict, or where an
arbitration clause appears to conflict with another provision of the contract, the
court must try to reconcile the conflicting provisions, just as it would do with any
other contract provision. See Mastrobuono v. Shearson Lehman Hutton, Inc., 514
U.S. 52, 64 (1995) (harmonizing an arbitration clause with a choice-of-law
provision so as to resolve potential conflict as to the availability of punitive
damages in the arbitration proceeding); H.C. Lawton, Jr., Inc. v. Truck Drivers,
Chauffers & Helpers Local Union No. 384, 755 F.2d 324, 329 (3d Cir. 1985)
(reconciling seemingly conflicting provisions in recognition of the legal principles
“that all contractual provisions be read to make sense, and that arbitration be
favored”) (emphasis in original).
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Thus, the trial court in the instant case was required to read the two
arbitration clauses in a complementary fashion in an attempt to resolve any conflict
so as to give effect to each term in the parties’ written agreements and to uphold
their agreement to arbitrate. Had the trial court done that, then it would have
discovered no actual conflict as to the Buyers’ obligation to arbitrate their claims
against Kendall.
The arbitration provisions contained in the purchase order and the financing
agreement are as follows.
Purchase order:
MEDIATION, ARBITRATION AND WAIVER OF TRIAL BY
JURY: ANY CONTROVERSY OR CLAIM ARISING OUT OF
OR RELATED TO THIS ORDER OR TO THE VEHICLE OR
WITH RESPECT TO ANY CLAIM ARISING BY VIRTUE OF
ANY REPRESENTATIONS ALLEGED TO HAVE BEEN
MADE BY THE DEALER OR DEALER’S REPRESENTATIVE,
SHALL BE SETTLED AND FINALLY DETERMINED BY
MEDIATION OR BINDING ARBITRATION AS PROVIDED
BY AND IN ACCORDANCE WITH THE FLORIDA
ARBITRATION CODE. THIS ARBITRATION AGREEMENT
IS TO BE INTERPRETED TO COVER ALL POTENTIAL
CLAIMS ARISING IN TORT, CONTRACT, FLORIDA OR
FEDERAL STATUTES, OR COMMON LAW, INCLUDING
CLAIMS FOR PERSONAL INJURIES RESULTING FROM
ALLEGED DEFECTS IN THE VEHICLE. The claim will first be
submitted for non-binding mediation to a mediator certified by the
Florida Supreme Court. If the parties are unable to agree upon a
mediator, either party can petition the appropriate Miami-Dade
County Court for the appointment of a mediator. If not resolved by
mediation, the claim will be submitted to a single agreed upon
arbitrator. If the parties are unable to agree upon an arbitrator, either
party can petition the appropriate Miami-Dade County Court for the
14
appointment of an arbitrator. The parties agree that the final
arbitration hearing shall take place within six months from the
selection of any arbitrator. The arbitrator can extend the final hearing
for an additional six months if he finds highly exceptional
circumstances justifying such an extension. A judgment upon the
award rendered by the arbitrator may be entered in any Miami-Dade
County Court having jurisdiction of the matter. However, any disputes
wherein the Purchaser or dealer seeks damages of less than $5000.00,
excluding costs and attorneys’ fees, shall be resolved in the small
claims court of Miami-Dade County. In the event that any such small
claims suit is filed in a Miami-Dade County Court and an amendment
to the pleadings or counterclaim results in a claim for damages in
excess of $5000.00, then this binding arbitration shall apply and the
parties agree to jointly dismiss or stay the small claims proceedings
and proceed with the requirements of this paragraph. The cost of the
mediation and arbitration proceedings shall be borne equally by
Dealer and Purchaser. All mediation and arbitration proceedings are to
take place physically in Miami-Dade County, Florida. IN THE
EVENT THAT THE PARTIES MUTUALLY AGREE IN
WRITING TO AVOID ARBITRATION OR IF A COURT OF
COMPETENT JURISDICTION DETERMINES THAT A
PARTICULAR DISPUTE BETWEEN THE PARTIES IS NOT
SUBJECT TO THIS ARBITRATION PROVISION AND IT
BECOMES NECESSARY FOR EITHER PARTY TO
LITIGATE A DISPUTE BETWEEN THE PARTIES, THEN, IN
THAT EVENT, THE PARTIES HEREBY MUTUALLY WAIVE
THEIR RIGHT TO A TRIAL BY JURY, AND AGREE THAT
ANY SUCH LITIGATION SHALL BE IN A COURT OF
COMPETENT JURISDICTION LOCATED IN MIAMI-DADE,
COUNTY, FLORIDA. In any mediation arbitration or litigation
proceedings between the parties, the prevailing party shall be entitled
to recover reasonable attorneys’ fees, and, in the event [sic] litigation,
the cost of litigation on all levels including any appeals.
Financing agreement:
ARBITRATION CLAUSE
PLEASE REVIEW – IMPORTANT - AFFECTS YOUR
LEGAL RIGHTS
15
1. EITHER YOU OR WE MAY CHOOSE TO HAVE ANY
DISPUTE BETWEEN US DECIDED BY ARBITRATION AND
NOT IN COURT OR BY JURY TRIAL.
2. IF A DISPUTE IS ARBITRATED, YOU WILL GIVE UP YOUR
RIGHT TO PARTICIPATE AS A CLASS REPRESENTATIVE
OR CLASS MEMBER ON ANY CLASS CLAIM YOU MAY
HAVE AGAINST US INCLUDING ANY RIGHT TO CLASS
ARBITRATION OR ANY CONSOLIDATION OF INDIVIDUAL
ARBITRATIONS.
3. DISCOVERY AND RIGHTS TO APPEAL IN ARBITRATION
ARE GENERALLY MORE LIMITED THAN IN A LAWSUIT,
AND OTHER RIGHTS THAT YOU AND WE WOULD HAVE
IN COURT MAY NOT BE AVAILABLE IN ARBITRATION.
Any claim or dispute, whether in contract, tort, statute or otherwise
(including the interpretation and scope of this Arbitration Clause, and
the arbitrability of the claim or dispute), between you and us or our
employees, agents, successors or assigns, which arises out of or
relates to your credit application, purchase or condition of this vehicle,
this contract or any resulting transaction or relationship (including any
such relationship with third parties who do not sign this contract)
shall, at your or our election, be resolved by neutral binding
arbitration and not by a court action. If federal law provides that a
claim or dispute is not subject to binding arbitration, this Arbitration
Clause shall not apply to such claim or dispute. Any claim or dispute
is to be arbitrated by a single arbitrator on an individual basis and not
as a class action. You expressly waive any right you may have to
arbitrate a class action. You may choose one of the following
arbitration organizations and its applicable rules: the National
Arbitration Forum, Box 50191, Minneapolis, MN 55405-0191
(www.arbforum.com), the American Arbitration Association, 335
Madison Ave., Floor 10, New York, NY 10017-4605 (www.adr.org),
or any other organization that you may choose subject to our approval.
You may get a copy of the rules of these organizations by contracting
the arbitration organization or visiting its website.
Arbitrators shall be attorneys or retired judges and shall be selected
pursuant to the applicable rules. The arbitrator shall apply governing
substantive law in making an award. The arbitration hearing shall be
conducted in the federal district in which you reside unless the
16
Creditor-Seller is a party to the claim or dispute, in which case the
hearing will be held in the federal district where this contract was
executed. We will advance your filing, administration, service or case
management fee and your arbitrator or hearing fee all up to a
maximum of $2500, which may be reimbursed by decision of the
arbitrator at the arbitrator’s discretion. Each party shall be responsible
for its own attorney, expert and other fees, unless awarded by the
arbitrator under applicable law. If the chosen arbitration
organization’s rules conflict with this Arbitration Clause, then the
provisions of this Arbitration Clause shall control. The arbitrator’s
award shall be final and binding on all parties, except that in the event
the arbitrator’s award for a party is $0 or against a party is in excess of
$100,000, or includes an award of injunctive relief against a party,
that party may request a new arbitration under the rules of the
arbitration organization by a three-arbitrator panel. The appealing
party requesting new arbitration shall be responsible for the filing fee
and other arbitration costs subject to a final determination by the
arbitrators of a fair apportionment of costs. Any arbitration under this
Arbitration Clause shall be governed by the Federal Arbitration Act (9
U.S.C. § 1 et. seq.) and not by any state law concerning arbitration.
You and we retain any rights to self-help remedies, such as
repossession. You and we retain the right to seek remedies in small
claims court for disputes or claims within that court’s jurisdiction,
unless such action is transferred, removed or appealed to a different
court. Neither you nor we waive the right to arbitrate by using self-
help remedies or filing suit. Any court having jurisdiction may enter
judgment on the arbitrator’s award. This Arbitration Clause shall
survive any termination, payoff or transfer of this contract. If any part
of this Arbitration Clause, other than waivers of class action rights, is
deemed or found to be unenforceable for any reason, the remainder
shall remain enforceable. If a waiver of class action rights is deemed
or found to be unenforceable for any reason in a case in which class
action allegations have been made, the remainder of this Arbitration
Clause shall be unenforceable.
17
We now address each of the “irreconcilable conflicts” identified by the trial
court. We begin with the conflict which the trial court found was especially
“problematic” and the only conflict specifically addressed in the trial court’s order.
1. The obligation to arbitrate and waiver of a jury trial
A review of the purchase order reflects that it requires that all claims for
damages in excess of $5,000 be submitted for non-binding mediation, and if they
are not resolved by mediation, they are to be resolved by binding arbitration unless
both parties agree in writing to avoid arbitration or the court determines that the
dispute is not subject to arbitration. In the event the dispute is litigated, the parties
waive their right to a jury trial.
The financing agreement provides for arbitration if either party so elects (in
other words unless both sides agree not to arbitrate the dispute). Although the
financing agreement could be read to allow for a jury trial if the dispute is not
submitted for binding arbitration, this potential conflict is totally irrelevant to the
instant analysis because it is undisputed that Kendall has demanded binding
arbitration, and therefore, under both the purchase order and the financing
agreement, the Buyers must resolve their claims by binding arbitration, which
obviously precludes any consideration of a jury trial. Because Kendall has
demanded arbitration, there clearly is no “irreconcilable” conflict between the two
arbitration provisions.
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We also find no irreconcilable conflict between the requirement in the
purchase order to submit all claims to non-binding mediation prior to submitting
the claims to binding arbitration unless the parties agree in writing to avoid
arbitration, and the financing agreement, which contains no such requirement.
Because the purchase order requires non-binding mediation, the purchase order and
financing agreement, when read together, require non-binding mediation. There is
no irreconcilable conflict between them. Although none of the parties have asked
to submit the claims to non-binding mediation, they were certainly permitted to do
so. Thus, if any of the parties had invoked his, her, or its right to non-binding
mediation under the purchase order, that request likely would have been granted.
However, we note that, as with arbitration clauses, mediation can be waived.
DVDPlay, Inc. v. DVD 123 LLC, 930 So. 2d 816, 820 n.2 (Fla. 3d DCA 2006)
(stating that a party waived mediation because, although the contract contained an
enforceable mediation clause, the party “never sought to judicially compel
mediation, and instead it filed a lawsuit”); see also Coastal Sys. Dev., Inc. v.
Bunnell Found., Inc., 963 So. 2d 722, 724 (Fla. 3d DCA 2007) (“A party who
actively participates in a lawsuit waives the right to arbitration.”); Morrell v.
Wayne Frier Manufactured Home Ctr., 834 So. 2d 395, 397-98 (Fla. 5th DCA
2003). Because none of the parties have requested non-binding mediation, we
19
decline to express an opinion as to whether the contractual right to mediation has
been waived.
Thus, there is clearly no irreconcilable conflict between the purchase order
and the financing agreement precluding the enforcement of the arbitration
provisions contained in these two documents and to which all of the parties have
agreed.
2. The choice of law provisions
The purchase order provides that arbitration is to be “in accordance with the
Florida Arbitration Code.” The financing agreement provides that the Buyers may
choose any of the following arbitration organizations and its applicable rules to
arbitrate their claims: the National Arbitration Forum, the American Arbitration
Association, or any other organization subject to Kendall’s approval. Further, any
arbitration under the arbitration clause shall be governed by the Federal Arbitration
Act (9 U.S.C. §1 et. seq.) and not by any state law concerning arbitration.
While, at first blush, it would appear that the two choice of law provisions
are in conflict, had the trial court attempted, as it was required, to resolve the
conflict, it would have actually discovered that these two provisions are not in
conflict. First, as the Florida Supreme Court has said not once, but twice, “[i]n
Florida, an arbitration clause in a contract involving interstate commerce is subject
to the [FAC], to the extent that the FAC is not in conflict with the FAA.” Visiting
20
Nurse Ass’n of Fla., Inc., 154 So. 3d 1115, 1124-25 (Fla. 2014); see also Shotts v.
OP Winter Haven, Inc., 86 So. 3d 456, 463-64 (Fla. 2011); CT Miami, LLC v.
Samsung Elec. Latinoamerica Miami, Inc., 201 So. 3d 85, 90 n.3 (Fla. 3d DCA
2015) (acknowledging the Florida Supreme Court’s opinion in Shotts and finding
that although the FAC governs the proceedings to the extent it does not directly
conflict with the FAA, “[t]he sections of the FAC and FAA relevant to the
determination of this appeal, however, are virtually identical,’ . . . so the
determination is not dispositive of the case at bar”).
As in CT Miami, this Court recognizes the Florida Supreme Court’s
holdings in Shotts, 86 So. 3d at 463, and Visiting Nurse Ass’n of Florida, 154 So.
3d at 1224-25, and notes that although the FAA controls when a transaction
involves interstate commerce, “[i]n Florida, an arbitration clause in a contract
involving interstate commerce is subject to the [FAC], to the extent the FAC is not
in conflict with the FAA.” Shotts, 86 So. 3d at 463. However, whether the FAA
or FAC controls in the instant case is not determinative of whether there exists
irreconcilable conflict between the purchase order and the financing agreement
because we find, as this Court found in CT Miami, “[t]he sections of the FAC and
FAA relevant to the determination of this appeal, however, are ‘virtually
identical.’” CT Miami, 201 So. 3d at 90 n.3. Thus, our decision is in no way
based on a finding of preemption. Rather, our finding is based on the failure of the
21
Buyers to demonstrate any irreconcilable differences between the FAC and the
FAA relevant to this case.
Although the Buyers argued that there were three specific irreconcilable
differences between the FAC and the FAA, our review demonstrates that these
specific provisions are not in conflict. First, the Buyers attempt to show a conflict
between certain provisions of the Revised Florida Arbitration Code (the “RFAC”)
and the FAA. However, the arbitration agreements at issue in this case were
entered into in 2008 and 2011. (Kendall sold Dayron Ortega a new automobile in
2008, and sold Erislandis Marquez and Dianellys Y. Diaz a used automobile in
2011). The RFAC “governs an agreement to arbitrate made on or after July 1,
2013.” § 682.013, Fla. Stat. (2016); see also CT Miami, 201 So. 3d at 91 (noting
that “the parties correctly agree that the pre-2013 version of the [FAC] applies
because the contract at issue was drafted and signed in 2009”). Because the
arbitration agreements at issue in this case were entered into prior to July 1, 2013,
the Buyers’ reliance on the RFAC in an attempt to find a conflict between the FAC
and the FAA is misplaced.
The Buyers’ second argument—that the FAC and the FAA provide different
time limitations in which to file an application to modify or correct an award is
incorrect. Both the FAA and the FAC provide for a three-month time limit to
22
modify or correct an award. See 9 U.S.C. § 12; §§ 682.13(2), 682.14 (1), Fla. Stat.
(2012).
Lastly, the Buyers contend that because the FAC does not allow for a waiver
of representation, and the FAA is silent on this issue, there is an irreconcilable
difference between the two. However, because the FAA is silent as to this issue,
the FAC controls and there is no conflict.
A review of the relevant provisions of the FAC and the FAA demonstrates
that they are substantively nearly identical. Because the Buyers have not identified
any relevant irreconcilable differences between the FAC and the FAA, there is no
conflict between the choice of law provisions in the purchase order and the
financing agreement. There is no conflict to resolve, and certainly no justification
for invalidating the arbitration provisions contained in the documents the Buyers
signed when they purchased their automobiles from Kendall.
3. Location of the arbitration
The purchase order provides that all mediation and arbitration proceedings
are to take place in Miami-Dade County. The financing agreement states that the
arbitration hearing shall be conducted in the federal district in which the Buyers
reside unless the “Creditor-Seller” (which in this case is Kendall) is a party to the
claim or dispute, in which case, the hearing will be held in the federal district
where the contract was executed.
23
As is readily obvious, these two provisions, under the facts of this case do
not conflict and are easily harmonized. The contracts in question were executed in
Miami-Dade County, which is in the federal Southern District of Florida, and is
where the Buyers filed their lawsuit against Kendall.
4. Delegation of issues
“The delegation provision is an agreement to arbitrate threshold issues
concerning the arbitration agreement.” Rent-A-Center, W., Inc. v. Jackson, 561
U.S. 63, 69 (2010). The financing agreement authorizes the arbitrator to decide
“the interpretation and scope of the Arbitration Clause, and the arbitrability of the
claim or disputes.” The purchase order, on the other hand, is silent. Thus, there is
no conflict between the purchase order and the financing agreement on the issue of
delegation. More importantly, because there is no dispute in this case that the
Buyers’ claims fall within the scope of the broad arbitration provisions, there is
certainly no “irreconcilable conflict.”
5. Class actions
Although the financing agreement expressly bars class action proceedings
and the purchase order is silent as to class actions, this does not create an
“irreconcilable conflict” as the trial court found. Had the trial court attempted to
harmonize the two provisions and resolve potential conflict, it would have
discovered that under the FAA “a party may not be compelled . . . to submit to
24
class arbitration unless there is a contractual basis for concluding that the party
agreed to do so.” Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662, 684
(2010); see also Anderson v. Maronda Homes, Inc. of Fla., 98 So. 3d 127, 130
(Fla. 2d DCA 2012) (Larose, J., concurring) (“Assent to class arbitration is needed;
agreement cannot be inferred from silence.”). Because the financing agreement
expressly bars class action proceedings and, in the purchase order, the parties did
not expressly agree to permit class actions, then under both documents, class
actions are not permitted.
6. Cost of arbitration
The purchase order provides that the cost of the mediation and the
arbitration proceedings shall be borne equally by Kendall and the Buyers. In the
financing agreement, Kendall agreed to advance the Buyers’ “filing,
administration, service or case management fee and the [Buyers’] arbitrator or
hearing fee” up to $2500, which, at the discretion of the arbitrator, may be
reimbursable. As Kendall aptly noted, “[t]hese provisions can be reconciled by
requiring the Dealer to advance the fees of arbitration up to a maximum of $2500
before requiring that the Dealer and the Purchaser bear the remaining costs of
arbitration equally.” Thus, there is clearly no “irreconcilable conflict.”
7. Right to appeal
25
As a matter of law, there is no right to appeal the merits of an arbitrator’s
award. See Hall St. Assocs., L.L.C. v. Mattel, Inc., 552 U.S. 576, 588-90 (2008).
An arbitrator’s award may be set aside on very limited statutory grounds. See id.
Both arbitration provisions provide for arbitration by a single arbitrator. The
financing agreement contains a provision that in the event the arbitrator’s award is
$0 or in excess of $100,000, or it includes an award granting injunctive relief, then
a party may request a new arbitration by a three-arbitrator panel. Thus, under
Mastrobuono, 514 U.S. at 64; H.C. Lawton, Jr., Inc., 755 F.2d at 329; and Arthur
Rutenberg Corp., 506 So. 2d at 34, the trial court was required to harmonize the
two arbitration clauses and conclude that because the purchase order was silent as
to this issue, and the parties agreed to this procedure in the financing agreement,
then the parties agreed to the procedure. As such, there is no “irreconcilable
conflict.”
8. Attorney’s fees
The purchase order provides that the prevailing party shall be entitled to
recover reasonable attorney’s fees; whereas the financing agreement provides that
each party shall be responsible for its own attorney’s fees “unless awarded by the
arbitrator under applicable law,” and “the arbitrator shall apply governing
substantive law in making an award.” Since FDUPTA entitles the prevailing party
26
to recover its fees, see § 501.2105, Fla. Stat. (2012), there is no conflict, let alone
“irreconcilable conflict.”
We also specifically note that under basic contract principles, conflicts
within the written agreement are to be construed against the drafter, which in this
case is Kendall. Goodwin v. Blu Murray Ins. Agency, Inc., 939 So. 2d 1098, 1102
(Fla. 5th DCA 2006) (“To the extent any ambiguity exists in the interpretation of
the contract, it will be strictly construed against the drafter.”); Tannen v. Equitable
Life Ins. Co. of Washington, D.C., 303 So. 2d 352, 355 (Fla. 3d DCA 1974)
(stating that “any ambiguity of language within the contract will be strictly
construed against the party who chose the language and drafted the contract”).
Thus, for example, if there was a conflict between the two arbitration provisions as
to whether the prevailing party was entitled to its fees, which could not be
reconciled, then that conflict must be construed in favor of the Buyers. But
whether the prevailing party will be entitled to its fees also is not relevant to the
issue of whether there exists a valid agreement to arbitrate. This is typically an
issue to be resolved by the arbitrator.
In sum, had the trial court actually scrutinized the two arbitration clauses,
and attempted to harmonize them as it was required to do, it would have
discovered no irreconcilable conflict so as to vitiate the Buyers’ agreement to
arbitrate their claims against Kendall.
27
We also cannot ignore the fact that in this case, the Buyers are seeking
avoidance of the arbitration clause contained in the contracts they signed without
attempting to read or learn what provisions they were agreeing to, other than the
financial terms associated with the purchase of their vehicles. They are not
claiming that they were confused by their own interpretation of the terms contained
in the arbitration clauses or that their interpretation differed from that explained by
Kendall’s employees when they signed the documents. In other words, these
particular plaintiffs do not claim they were confused or misled by the terms, nor
can they, because they did not attempt to learn what the terms were. They did not
attempt to read them, tell anyone they could not read them, ask any questions, ask
that the documents be read to them, or ask anyone to explain them. They also
admit that no one attempted to explain the documents to them (other than the
financial terms) and therefore no one omitted an explanation of the arbitration
clauses or misrepresented what they provided. Instead, the Buyers blindly signed
the documents willfully agreeing to whatever the terms were and specifically
acknowledged that they had read both sides of the documents, including the
arbitration clauses before signing, and that they were agreeing to the terms of the
documents.
III. Unconscionability
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The trial court additionally found that the terms of the arbitration clauses
were unconscionable. We highlight that the party seeking to avoid arbitration has
the burden to prove both procedural and substantive unconscionability. Murphy v.
Courtesy Ford, L.L.C., 944 So. 2d 1131, 1134 (Fla. 3d DCA 2006). “[W]hile both
elements must be present, they need not be present to the same degree.” Basulto
III, 141 So. 3d at 1159. Procedural unconscionability deals with whether, given the
totality of the circumstances, the parties had a meaningful choice to refuse the
contract terms. DePrince v. Starboard Cruise Servs., Inc., 163 So. 3d 586, 595 (Fla.
3d DCA 2015). Substantive unconscionability deals with the reasonableness of
those terms. Murphy, 944 So. 2d at 1134.
While a contract of adhesion could indicate procedural unconscionability in
some circumstances, “the presence of an adhesion contract alone does not require a
finding of procedural unconscionability.” VoiceStream Wireless Corp. v. U.S.
Commc'ns, Inc., 912 So. 2d 34, 40 (Fla. 4th DCA 2005); see also AT&T Mobility
LLC v. Concepcion, 563 U.S. 333, 346-47 (2011) (stating that “the times in which
consumer contracts were anything other than adhesive are long past”). It is
important to inquire into additional surrounding circumstances, such as whether a
party could obtain the desired product or services elsewhere, whether one party
pressured or rushed the other into signing a contract, or whether the party was
otherwise precluded from inquiring into the terms of the agreement. See DePrince,
29
163 So. 3d at 595; Fonte, 903 So. 2d at 1026-27; Orkin Exterminating Co. v.
Petsch, 872 So. 2d 259, 265 (Fla. 2d DCA 2004); Gainesville Healthcare Ctr., 857
So. 2d at 285-288 (holding that the trial court’s findings were insufficient to prove
procedural unconscionability where the contract was pre-printed, the plaintiff did
not understand the terms of the contract, and no one explained the terms to the
plaintiff).
The trial court found that the arbitration clauses were procedurally
unconscionable because: (1) the terms of the arbitration clauses in the purchase
order and the financing agreement conflicted, such that there was no meaningful
disclosure of the terms by which the Buyers would be bound; (2) the contracts
containing the arbitration clauses were offered on a “take-it-or-leave-it” basis, such
that the Buyers had no meaningful choice or opportunity to negotiate the terms;
and (3) Kendall failed to explain the arbitration provisions to the Buyers in
Spanish.
For the reasons we have already discussed, the terms of the arbitration
clauses in the purchase order and the financing agreement did not irreconcilably
conflict and Kendall was not required to explain the arbitration clauses to the
Buyers in Spanish. Thus, because the Buyers had a full and fair opportunity to
inquire into the terms of the documents, and they declined to do so, they will not
30
now be able to escape the binding effect of their unequivocal assent to the
arbitration clauses by claiming that Kendall did not explain the terms.
The trial court’s remaining justification, that the arbitration agreement was
offered on a “take-it-or-leave-it” basis, is on these facts insufficient to prove that
the Buyers’ execution of the arbitration agreement was procedurally
unconscionable. See Concepcion, 563 U.S. at 346-47 (holding that “the times in
which consumer contracts were anything other than adhesive are long past”); Cruz
v. Cingular Wireless, LLC, 648 F.3d 1205, 1214-15 (11th Cir, 2011) (rejecting
unconscionability challenges based on class waiver, small venue claims, and the
adhesive nature of form contracts); Spring Lake NC, 110 So. 3d at 918
(recognizing the role of standardized contracts and that most contracts are no
longer individually negotiated and handwritten). Because the Buyers failed to
prove any degree of procedural unconscionability, we conclude that the arbitration
agreements contained in the purchase order and financing agreement are not
unconscionable.
CONCLUSION
We find that, as a matter of law, each of the trial court’s alternative findings
for denying Kendall’s motion to compel arbitration are flawed. Because the Buyers
did not attempt to learn what the documents they were signing said or meant by
reading them, requesting that they be read or explained to them, or ask any
31
question to educate themselves as to the terms; there is no evidence that the Buyers
were rushed, pressured, or coerced into signing the documents; there is no
evidence that Kendall’s employees took it upon themselves to explain the
documents and then either omitted mentioning the arbitration provisions or
misrepresented the meaning of those provisions; and the arbitration provisions in
the purchase order and financing agreement did not irreconcilably conflict, the trial
court erred by finding that there was no valid agreement to arbitrate. We also reject
the trial court’s finding of procedural unconscionability. Accordingly, we reverse
the trial court’s order denying Kendall’s motion to compel arbitration and remand
for proceedings consistent with this opinion.
Reversed and remanded.
32