UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

Case No. 22-cv-62020-BLOOM/Valle

DEFIANCE CHARTERS, L.L.C., 

Plaintiff, 

v. 

FLORIDA YACHT MANAGEMENT, LLC, 

Defendant.

______________________________/ 

ORDER ON PEITITON FOR ORDER COMPELLING ARBITRATION

THIS CAUSE is before the Court upon Plaintiff’s Petition to Compel Arbitration, ECF 

No. [1-3], filed on October 31, 2022 (“Motion”). On December 19, 2022, Defendant filed a 

Memorandum of Law in Opposition to Petition for Order Compelling Arbitration, ECF No. [10-

1], (“Response”), to which Plaintiff did not Reply. The Court has considered the Motion, all 

opposing and supporting submissions, the record in this case, the relevant law, and is otherwise 

fully advised. For the reasons set forth below the Motion is denied. 

I. BACKGROUND

The Parties entered into a Yacht Management Agreement (“Agreement”). ECF No. [1-4] 

The Agreement contains a section titled “Law and Arbitration,” which reads in relevant part: 

The parties shall resolve any dispute relating to or arising from this agreement by 

binding, confidential arbitration in Miami, Florida, or such other place as the parties 

may agree, according to the Rules of Procedure of the Miami Maritime Arbitration 

Council (the “MMAC”) in effect at the commencement of the arbitration. The 

parties will appoint three (3) arbitrators as follows: each party shall appoint an 

arbitrator, and the two arbitrators so appointed will jointly appoint a third arbitrator. 

If one party appoints its arbitrator and the other party fails to appoint an arbitrator 

within twenty (20) days after receiving notice of the first arbitrator’s appointment, 

the first arbitrator will act as sole arbitrator and his decision will be binding as if 

issued by a panel of three arbitrators. 

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Id. at ¶ 18. The Miami Maritime Arbitration Council (“MMAC”) Rules referenced in the 

Agreement contain their own procedure for the appointment of arbitrators. Article 7, of the MMAC 

Rules reads:

1. If three arbitrators are to be appointed, each party shall appoint one arbitrator. 

The two arbitrators thus appointed shall choose the third arbitrator from the Miami 

Maritime Arbitration Council's list of approved arbitrators, who will act as the 

presiding arbitrator of the tribunal.

2. If within thirty (30) days after the receipt of a party's notification of the 

appointment of an arbitrator, the other party has not notified the first party of the 

arbitrator he has appointed, the first party may request the Miami Maritime 

Arbitration Council to appoint the second arbitrator.

3. If within thirty (30) days after the appointment of the second arbitrator the two 

arbitrators have not agreed on the choice of the presiding arbitrator, the presiding 

arbitrator shall be appointed by the Miami Maritime Arbitration Council in the 

same way as a sole arbitrator would be appointed under Article 6.

ECF No. [1-6] at 3.

On March 28, 2022, Plaintiff sent its Notice of Arbitration (“Notice”) to Defendant. In the 

last paragraph of the Notice, Plaintiff wrote: 

Going forward, pursuant to Article 7 of the MMAC the first item of business is to 

nominate our arbitrators. By this Notice of Arbitration, Claimant nominates Robert 

S. Glenn, Jr. as arbitrator.

ECF No. [1-5] at 3. Thirty days later, on April 27, 2022, Defendant appointed its arbitrator. See 

ECF Nos. [1-3] at 2, [10-2] at 1. Plaintiff objected to Defendant’s appointment of an arbitrator as 

untimely. ECF No. [10-2]. The parties have not resolved their disagreement over the composition

of the arbitral panel that will hear their dispute. 

Plaintiff filed the instant Motion in which it contends that the selection of arbitrators 

properly proceeds under the terms of the arbitration clause (“Arbitration Clause”) in the parties’ 

underlying Agreement rather than according to the default rules of the MMAC. Defendant 

responds that because Plaintiff appointed its arbitrator under Article 7 of the MMAC, the 

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Agreement did not contain a time is of the essence clause, and there is no prejudice to Plaintiff 

proceeding with three arbitrators, Plaintiff’s Petition should be denied, and arbitration should 

proceed with three arbitrators.

II. LEGAL STANDARD

“The Federal Arbitration Act (FAA) simply requires courts to enforce privately negotiated 

agreements to arbitrate, like other contracts, in accordance with their terms.” Goldberg v. Bear, 

Stearns & Co., Inc., 912 F.2d 1418, 1420 (11th Cir. 1990) (internal quotation marks omitted). 

“[T]he authority of the arbitrators in an arbitration proceeding is dependent on the provisions of 

the arbitration agreement under which the arbitrators were appointed.” Cat Charter, LLC v. 

Schurtenberger, 646 F.3d 836, 843 (11th Cir. 2011) (internal quotation marks omitted). “The FAA 

expressly provides that where a method for appointment is set out in [an] arbitration agreement, 

the agreed upon method of appointment shall be followed.” Ray v. Longhi, 3:20-CV-213-J-32JRK, 

2021 WL 307373, at *4 (M.D. Fla. Jan. 29, 2021) (quoting Brook v. Peak Int’l, Ltd., 294 F.3d 668, 

672–73 (5th Cir. 2002)) (internal quotation marks omitted). “[B]ecause arbitration is a creature of 

contract, the parties, when incorporating any set of arbitration rules by reference in an arbitration 

agreement, are free to include provisions in conflict with certain provisions of rules incorporated 

by reference; the specific provisions in the arbitration agreement take precedence and the 

arbitration rules are incorporated only to the extent that they do not conflict with the express 

provisions of the arbitration agreement.” Szuts v. Dean Witter Reynolds, Inc., 931 F.2d 830, 831-

32 (11th Cir. 1991).

III. DISCUSSION

No party challenges that their underlying dispute is subject to arbitration. The issue before 

the Court is whether Defendant’s appointment of an arbitrator thirty days after receiving Plaintiff’s 

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Notice of Arbitration, in which Plaintiff appointed the first arbitrator, is valid. Plaintiff contends 

that, pursuant to the controlling terms of the Agreement, Defendant’s selection of its arbitrator was 

untimely so arbitration should proceed with its arbitrator as the sole arbitrator. Defendant argues 

that (1) Plaintiff waived the contractual right to select arbitrators in accordance with the 

Agreement; (2) Plaintiff should be equitably estopped from proceeding with a sole arbitrator; (3) 

Plaintiff did not provide proper notice when it selected its arbitrator; and (4) the Agreement does 

not contain a time is of the essence clause and Plaintiff will not be prejudiced if arbitration proceeds 

with three arbitrators. 

A. Competing Terms

Plaintiff argues that the arbitrator selection process dictated by the parties’ Agreement 

controls. Plaintiff contends that contractual modifications of arbitration rules supersede default 

provisions as a matter of law and that the MMAC Rules themselves compel the application of any 

modifications. Defendant does not dispute those arguments, and instead states that Plaintiff 

“misapprehends why Article 7 of the Miami Maritime Arbitration Council (“MMAC”) Rules 

applies (rather than the contract) under the salient facts in this matter.” ECF No. [10-1] at 1. 

Plaintiff has articulated the correct rule. Agreements to arbitrate are enforced as contracts. 

As stated above, “[B]ecause arbitration is a creature of contract, the parties, when incorporating 

any set of arbitration rules by reference in an arbitration agreement, are free to include provisions 

in conflict with certain provisions of rules incorporated by reference; the specific provisions in the 

arbitration agreement take precedence and the arbitration rules are incorporated only to the extent 

that they do not conflict with the express provisions of the arbitration agreement.” Szuts v. Dean 

Witter Reynolds, Inc., 931 F.2d 830, 831-32 (11th Cir. 1991).

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The issue raised here is not a dispute over whether the modifications to the MMAC Rules 

contained in the Agreement are enforceable as terms included in a contract between two parties. 

Instead, the Court must decide whether Plaintiff waived its rights under the Agreement, whether 

Plaintiff must be equitably estopped from enforcing its rights, or whether Plaintiff breached the 

Agreement by providing insufficient notice of arbitration. The Court therefore addresses those 

issues.

B. Waiver or Modification of Agreement

Defendant argues that because Plaintiff elected to invoke Article 7 when it selected an 

arbitrator, Plaintiff waived or modified the terms of the Agreement. 

Waiver “‘is the intentional relinquishment or abandonment of a known right.’” Morgan v. 

Sundance, Inc., 142 S. Ct. 1708, 1713 (2022) (quoting United States v. Olano, 507 U.S. 725, 733

(1993)). “In Florida, implied waiver of a contractual right requires conduct which implies the 

voluntary and intentional relinquishment of a known right.” GEICO Marine Ins. Co. v. 

Shackleford, 945 F.3d 1135, 1142 (11th Cir. 2019) (internal quotation marks omitted).

Defendant emphasizes that the section of Plaintiff’s Notice of Arbitration (“Notice”) 

nominating an arbitrator reads:

Going forward, pursuant to Article 7 of the MMAC the first item of business is to 

nominate our arbitrators. By this Notice of Arbitration, Claimant nominates Robert 

S. Glenn, Jr. as arbitrator.

ECF No. [1-5] at 3. Defendant contends that by such Notice, Plaintiff waived its right to select 

arbitrators according to the procedures set forth in the Agreement and instead elected to proceed 

under Article 7 of the MMAC. Plaintiff counters that Defendant now seeks to void the language

in the Agreement it specifically drafted.

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Relevant to the analysis of waiver, Defendant concedes that in the same Notice in which 

Plaintiff nominated its arbitrator, Plaintiff invoked reference to the Arbitration Clause stating, 

“[r]eference is hereby made to the Arbitration Clause found at Section 18 of the parties’ Yacht 

Management Agreement, attached hereto as Attachment 1.” Id. at 2. The record also establishes 

that when Defendant appointed its arbitrator thirty days after it received Plaintiff’s Notice, Plaintiff 

objected the following day. See ECF No. [10-2].

The Court therefore finds that Plaintiff did not act inconsistently with its rights under the 

Agreement. Although Plaintiff cited Article 7 in its nomination of an arbitrator, it did not expressly 

waive its rights under the Agreement. Plaintiff’s objection one day after Defendant’s nomination 

of an Arbitrator is not conduct from which the Court can draw the conclusion that there was an 

implied waiver of a contractual right.

C. Equitable Estoppel

Defendant argues that Petitioner is estopped from seeking enforcement of the Agreement’s 

twenty-day time limitation for Defendant to select its arbitrator. Plaintiff did not address the issue 

of equitable estoppel.

Defendant states that equitable estoppel “consists of words or conduct which causes 

another person to believe a certain state of things exists, and to consequently change his or her 

position in an adverse way.” Whetstone Candy Co., Inc. v. Kraft Foods, Inc., 351 F.3d 1067 (11th 

Cir. 2003). 

The Court relies on the more recent standard articulated by the Eleventh Circuit as the 

controlling law. “[T]he elements of federal common law equitable estoppel in this circuit are: “(1) 

the party to be estopped misrepresented material facts; (2) the party to be estopped was aware of 

the true facts; (3) the party to be estopped intended that the misrepresentation be acted on or had 

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reason to believe the party asserting the estoppel would rely on it; (4) the party asserting the 

estoppel did not know, nor should it have known, the true facts; and (5) the party asserting the 

estoppel reasonably and detrimentally relied on the misrepresentation.’” Dawkins v. Fulton Cnty. 

Gov’t, 733 F.3d 1084, 1089 (11th Cir. 2013) (quoting Busby v. JRHBW Realty, Inc., 513 F.3d 

1314, 1326 (11th Cir.2008)).

The facts reveal that all elements of the Eleventh’s Circuit test for equitable estoppel are 

satisfied. First, Plaintiff represented that it was appointing an arbitrator pursuant to Article 7 of the 

MMAC while it now asserts that it appointed its arbitrator consistent with the modification to 

Article 7 of the MMAC contained in the Agreement. Plaintiff misrepresented the material fact of 

the rule under which it sought to proceed. 

The second element is likewise satisfied. Plaintiff was aware of the Agreement and its 

modified terms at the time it represented that it was proceeding under Article 7 of the MMAC.1

As to the third element, Plaintiff knew that the Agreement contained a modified rule

limiting the time allotted by the default rule. Plaintiff also stated, and so the Court infers that it 

knew, that it appointed its arbitrator under Article 7 of the MMAC which provides ten additional 

days for the selection of an arbitrator. Therefore, Plaintiff had reason to know that the Defendant 

would believe it had more time to select its arbitrator. 

Defendant alleges that it did not know Plaintiff still intended to proceed by the terms of the 

Agreement when it invoked Article 7 of the MMAC in its Notice. Although the law imputes 

1 Even if Plaintiff was not actually aware, the law imputes on a party to a contract knowledge of 

the contents of that contract. See Quintana v. Transp. Am., Inc., 20-21300-CIV, 2021 WL 7368586, at *3 

(S.D. Fla. May 10, 2021), report and recommendation adopted, 20-21300-CIV, 2022 WL 538167 (S.D. 

Fla. Feb. 23, 2022) “[a] party has a duty to learn and know the contents of a proposed contract before he 

signs and delivers it and is presumed to know and understand its contents, terms, and conditions.”

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knowledge of the Agreement to Defendant, Defendant has alleged a good-faith belief that based 

on Plaintiff’s Notice it did not know that the method for selection of arbitrators was that set forth 

in the Agreement controlled, but instead believed that Plaintiff was proceeding under the MMAC 

Rules. Therefore, the Fourth element is satisfied.

Fifth and finally, Plaintiff’s Notice nominating an arbitrator “pursuant to Article 7 of the 

MMAC” reasonably led Defendant to detrimentally believe that the Article 7 procedure permitting 

thirty days for selection of the second arbitrator applied. In reliance on that belief, Defendant did 

not appoint an arbitrator until the thirtieth day. 

Having found that each element of the test is satisfied, the Court finds that equitable 

estoppel applies. Plaintiff is estopped from proceeding with a sole arbitrator. The Court therefore 

finds that Defendant’s appointment of an arbitrator was valid, and arbitration shall proceed 

pursuant to the terms of the Agreement. Because the Court has determined that arbitration must 

proceed with three arbitrators on the basis of equitable estoppel, the Court does not proceed to 

address Defendant’s remaining arguments.

IV. CONCLUSION

Accordingly, it is ORDERED and ADJUDGED as follows:

1. Plaintiff’s Motion, ECF No. [1-3], is DENIED;

2. The Parties shall proceed to arbitrate this matter with the two arbitrators already 

appointed and a third arbitrator to be appointed pursuant to the terms of the 

Agreement;

3. This case is STAYED pending arbitration. The parties may file a motion to lift the 

stay, if necessary, once the arbitration proceedings have concluded. 

4. The Clerk of Court shall ADMINISTRATIVELY CLOSE the case.

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DONE AND ORDERED in Chambers at Miami, Florida, on January 30, 2023.

_________________________________

BETH BLOOM

UNITED STATES DISTRICT JUDGE

Copies to: 

Counsel of Record

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