Courts May Not Ignore or Rewrite a Clear and Unambiguous Contractual Arbitration Provision, Even if One Party Never Intended Such Provision to Apply to Specific Claims
COURTS MAY NOT IGNORE OR REWRITE A CLEAR AND UNAMBIGUOUS CONTRACTUAL ARBITRATION PROVISION, EVEN IF ONE PARTY NEVER INTENDED SUCH PROVISION TO APPLY TO SPECIFIC CLAIMS
By: Ian T. Kravitz, Esq.
In Rodriguez v Builders Firstsource-Florida, LLC, 2010 WL 300364 (Fla. 4th DCA Jan. 27, 2010), Jose and Lorena Rodriguez (“Owners”) purchased a luxury residence in Boynton Beach, Florida in 2004. Four years later, Owners brought suit against GL Homes (“the General Contractor”) and Builders Firstsource-Florida (“the Window Contractor”), claiming that extensive property damage and personal injuries were caused by mold infestation of their residence resulting from the alleged negligent design and construction of the residence. General Contractor moved to compel arbitration pursuant to an arbitration provision contained in the purchase contract between Owners and General Contractor. The trial court granted General Contractor’s motion to compel arbitration of Owner’s claims. Owners appealed.
Under Florida law, there are three elements a court is required to consider when determining whether a dispute should be compelled to arbitration. Those are (1) whether a valid written agreement to arbitrate exists; (2) whether an arbitrable issue exists; and (3) whether the right to arbitration was waived. In this case, Owners challenged the second element. Owners argued that their claims for damages were not subject to the arbitration provision of the purchase contract because the claims resulted from negligent design and construction of the residence, not from the purchase of the residence. General Contractor argued that any duty owed to Owners for such claims only arose as a result of the purchase contract, thereby subjecting such claims to the arbitration requirement of the purchase contract.
In support of their position, Owners cited to several recent appellate court cases that support the position that mold personal injury claims are beyond the coverage of an arbitration clause contained within a real property sales contract. The appellate court rejected Owner’s arguments and found that what differentiated those cases from the current action was the actual language of the arbitration provision. The court pointed out that the arbitration clauses in the other cases were not specifically worded to include any claim or controversy related to the purchase contract or actual purchase of the real property. The court explained that the arbitration provision in this purchase contract, however, specifically provided for arbitration of all post closing disputes including any “claimed defect in or to the home … or the construction of the home … or any claims for personal injury ….”
The court held that since the language of the purchase contract “clearly and unambiguously” required submission of the very claims alleged in the lawsuit to arbitration, the trial could not rewrite the purchase contract or attempt to make that contract more reasonable to one party or the other. As a result, the appellate court affirmed the order of the trial court, and this matter proceeded to arbitration of Owner’s claims.
Florida law strongly favors arbitration as a means of resolving disputes. This case illustrates that when an arbitration provision clearly and unambiguously calls for the arbitration of specific claims, a court will have no power to rewrite that provision to suit one of the parties, even if that party never intended such claims to be subject to the arbitration requirement of the given contract.