Third District Court of Appeal

State of Florida 

Opinion filed June 12, 2024.

Not final until disposition of timely filed motion for rehearing.

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No. 3D22-1851

Lower Tribunal No. 21-3987

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The Ferraro Law Firm, P.A., etc., et al.,

Appellants/Cross-Appellees,

vs.

Royal Merchant Holdings, LLC, etc.,

Appellee/Cross-Appellant.

An Appeal from the Circuit Court for Miami-Dade County, Alan Fine, 

Judge.

The Ferraro Law Firm, P.A., and Leslie B. Rothenberg and Mathew D. 

Gutierrez; Boies Schiller Flexner LLP, and Jesse Panuccio and Eric M. 

Palmer (Fort Lauderdale), for appellants/cross-appellees.

Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A., and Eugene 

E. Stearns and Maria A. Fehretdinov and Alejandro D. Rodriguez, for 

appellee/cross-appellant.

Before LINDSEY, MILLER and BOKOR, JJ. 

BOKOR, J.
2

These cross-appeals challenge an order vacating an arbitration award 

in favor of Royal Merchant Holdings, LLC (“Royal Merchant”), as well as a 

successor judge’s subsequent order granting reconsideration and confirming 

that same award. Appellant, the Ferraro Law Firm (“Ferraro”), argues that 

the award was properly vacated and could not be reinstated because the 

arbitrator vitiated the fundamental fairness of the proceedings by relying 

solely on a ground for relief that was not pled as an affirmative claim. Royal 

Merchant cross-appeals to challenge the merits of the original order vacating 

the award. Under the specific circumstances present here, we find that the 

trial court properly vacated the award in the first instance, and the successor 

court abused its discretion by confirming it on reconsideration. 

The arbitration action related to Ferraro’s representation of Royal 

Merchant in an Ohio case founded on the breach of an agreement Royal 

Merchant had brokered between two nonparty companies. There, Royal 

Merchant claimed that it was entitled to recover as an intended third-party 

beneficiary to that agreement, but Ferraro asserted only that Royal Merchant 

was a party to the agreement instead of a beneficiary, which, in conjunction 

with Ferraro’s violations of various discovery orders, led the Ohio court to

dismiss the claims. During that litigation, Ferraro also advised Royal 

Merchant to reject an offer for an assignment of recovery rights from the 
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nonbreaching signatory to the agreement, which would have clarified Royal 

Merchant’s standing and allowed it to recover for the breach.

After dismissal of the Ohio case, Royal Merchant brought an arbitration 

complaint against Ferraro in Miami1 for legal malpractice, asserting various 

grounds for relief including Ferraro’s failure to raise a third-party beneficiary 

claim and failure to comply with discovery rules. In response, Ferraro 

asserted as an affirmative defense that Royal Merchant was not harmed 

because it was not entitled to recover as a third-party beneficiary. As an 

avoidance of that defense, Royal Merchant responded that it could have 

instead recovered as an assignee had Ferraro not advised it to reject the 

assignment proposal on the purported basis that Royal Merchant already 

had a third-party beneficiary claim.

Throughout the arbitration hearings, Royal Merchant repeatedly raised 

the issue of Ferraro’s failure to accept the assignment proposal, arguing it 

both as an affirmative basis for malpractice and as an avoidance of Ferraro’s 

affirmative defense of lack of prejudice. Over Ferraro’s objections, the 

arbitrator allowed Royal Merchant to present evidence and testimony about 

the assignment proposal but did not make a pre-judgment ruling as to 

1 The parties’ retainer agreement provided that disputes concerning the 

representation would be resolved by binding arbitration in Miami, Florida.
4

whether the issue could be tried by consent as an affirmative ground for 

relief. Ultimately, the arbitrator ruled in favor of Royal Merchant, relying 

solely on Ferraro’s advisement to reject the assignment proposal as the 

basis for malpractice and awarding Royal Merchant a total of $1,517,493.32. 

In doing so, the arbitrator also found that the assignment issue was tried by 

consent and that Ferraro was on notice it had “morphed” into an affirmative 

claim throughout the proceedings.

Ferraro subsequently moved for the circuit court to vacate the award, 

arguing that the arbitrator’s reliance on the unpled assignment issue as a 

basis for relief was fundamentally unfair and amounted to a due process 

deprivation. After a hearing, the court entered an order vacating the 

arbitration award to the extent it relied on the assignment issue. Royal 

Merchant moved for reconsideration, and a successor judge granted the 

motion, vacated the prior order, and confirmed the arbitration award in its 

entirety, finding that the proceedings were not fundamentally unfair and that 
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the original judge lacked any basis to vacate the award.

2 These appeals 

followed.3

An arbitration award shall be vacated where there has been 

“[m]isconduct by an arbitrator prejudicing the rights of the party to the 

arbitration proceeding.” § 682.13(1)(b)3., Fla. Stat. “Although an arbitrator 

need not follow all the niceties observed in court proceedings, the arbitrator 

must grant the parties a fundamentally fair hearing.” Talel Corp. v. 

Shimonovitch, 84 So. 3d 1192, 1194 (Fla. 4th DCA 2012). Further, it is wellestablished that “[d]ue process protections prevent a trial court from deciding 

matters not noticed for hearing and not the subject of appropriate pleadings.” 

Mizrahi v. Mizrahi, 867 So. 2d 1211, 1213 (Fla. 3d DCA 2004); see also

Cedars Med. Ctr., Inc. v. Ravelo, 738 So. 2d 362, 367 (Fla. 3d DCA 1999) 

(“The pleading of a legal theory is indispensable to a finding of liability on the 

basis of that theory.”); Arky, Freed, Stearns, Watson, Greer, Weaver & 

2 The original trial judge transferred to another division prior to hearing the 

reconsideration motion. Ferraro argues in part that the successor judge 

lacked jurisdiction to reconsider the order vacating the award because that

order was final. A successor judge typically may not modify a final order of 

a predecessor judge absent a finding of fraud or mistake. However, while 

we note that the original order vacating the award lacks indicia of finality, 

ultimately, we decline to address the merits of this argument as we reverse 

on the merits. 3 We review a trial court’s decision to confirm or vacate an arbitration award 

for abuse of discretion. See Murton Roofing Corp. v. FF Fund Corp., 930 

So. 2d 772, 773 (Fla. 3d DCA 2006).
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Harris, P.A. v. Bowmar Instrument Corp., 537 So. 2d 561, 563 (Fla. 1988) 

(“[L]itigants at the outset of a suit must be compelled to state their pleadings 

with sufficient particularity for a defense to be prepared.”).

While we are cognizant of arbitrators’ broad discretion to “conduct an 

arbitration in such manner as the arbitrator considers appropriate for a fair 

and expeditious disposition of the proceeding,” § 682.06(1), Fla. Stat., we 

find that the trial court properly vacated the award in the first instance and 

abused its discretion by confirming it on reconsideration. “Generally, due 

process requires fair notice and a real opportunity to be heard and defend in 

an orderly procedure before judgment is rendered.” Viets v. Am. Recruiters 

Enters., Inc., 922 So. 2d 1090, 1095 (Fla. 4th DCA 2006). Here, Royal 

Merchant repeatedly represented throughout the proceedings that the issue 

of the assignment proposal was not being argued as an affirmative basis for 

malpractice, but merely as an avoidance of Ferraro’s affirmative defense of 

lack of prejudice. When Ferraro objected and informed the arbitrator of the 

need to render a ruling on the issue, the arbitrator instead deferred the issue 

until the final order, only to then conclude that the issue was tried by consent 

all along. Thus, from the face of the record, it appears that the arbitrator’s 

consideration of the issue as an affirmative claim without prior notice 

prejudiced Ferraro’s ability to prepare its defense. The lack of a substantive 
7

requirement that claims for relief be pled in an arbitration proceeding in a 

specific manner does not negate a party’s right to fair and effective notice of 

the claims tried. 

Thus, we vacate the order confirming the award, reinstate the prior 

order vacating the award, and remand for additional proceedings.

Reversed.