Florida Appeals Court Ruling Demonstrates Power of Arbitration Agreements

Recently, on July 5th, 2017, the Third District Court of Appeal for the State of Florida issued a decision in the case of DDRA, LLC V. JARM, LLC, ET AL. This case involved a dispute over the applicability of a mandatory arbitration provision that had been included in a larger contract.

The court’s ruling in this case provides a great lesson for Florida business that have contracts with forced arbitration clauses. Here, our experienced West Palm Beach arbitration attorneys discuss this case and highlight the important things that it can tell us about the power of arbitration agreements in Florida.

Understanding DDRA, LLC V. JARM, LLC, ET AL. 

JARM LLC and a second company called Dude IP, LLC entered into a contract with two other firms, a company known as South Beach Delivery Dudes, and DDRA, LLC. Within this contract, was a forced arbitration provision, which mandated that arbitration would be used to resolve any legal disputes related to the agreement. Eventually, a dispute did arise regarding the use of trademarks under the licensing agreement. DDRA petitioned the court to rule that the arbitration provision was invalid, and thus could not apply to this type of case. The trial court and the appeals court both disagreed with the company’s assessment. The courts both agreed that they had no authority to make any decision regarding the applicability of the mandatory arbitration clause. 

Mandatory Arbitration Provisions are Generally Enforced in Florida   

For the most part, when parties agree to include an arbitration provision in their contract, that arbitration provision will be enforced. Florida court rarely set aside these types of provisions. Notably, in this case, the Third District Court of Appeals ruled that it was up to the arbitrator to determine whether or not arbitration was required as the means to resolve the trademark dispute. Indeed, the court ruled that it lacked legal authority to make a ruling on this specific issue.

Within the licensing agreement and the operating agreement, which were both at issue in this case, there was language that explicitly stated that any dispute over the applicability of the arbitration provision was to itself be decided by arbitration. The court pointed directly to this language, and stated that, because it was included, the court could not rule on the applicability of arbitration. This ruling shows just how powerful the language in contracts can be, particularly language pertaining to arbitration provisions. Florida courts will always do virtually anything they can to uphold the terms of the contract, and to require arbitration if that is what the parties agreed to in their voluntarily bargained for contract.

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At Pike & Lustig, LLP, our dedicated business law attorneys have extensive experience handling all aspects of arbitration claims. If you need legal assistance, we are standing by, ready to help your business. From our primary office in West Palm Beach and our recently opened second location in the heart of Miami, we proudly serve companies throughout southeastern Florida, including in Broward County.

Resource:

3dca.flcourts.org/Opinions/3D16-2631.pdf