DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA

FOURTH DISTRICT

UNITED STATES FIRE INSURANCE COMPANY,

Appellant,

v.

AMERICA WALKS AT PORT ST. LUCIE, LLC,

Appellee.

No. 4D2023-1784

[May 15, 2024]

Appeal from the Circuit Court for the Nineteenth Judicial Circuit, St. 

Lucie County; Brett M. Waronicki, Judge; L.T. Case No. 

562023CA000035A. 

Guy W. Harrison and Edward Etcheverry of Etcheverry Harrison, LLP, 

Fort Lauderdale, for appellant.

Theodore L. Tripp, Jr., and Meredith McBride of Hahn Loeser & Parks 

LLP, Fort Myers, for appellee.

GERBER, J.

The appellant surety, which had filed a declaratory judgment action in 

the circuit court against the appellee developer, appeals from the circuit 

court’s order granting the developer’s motion to compel the surety’s

declaratory judgment action to arbitration. The surety argues the circuit 

court erred in determining a valid arbitration agreement exists between 

the surety and the developer. The surety argues such a determination 

cannot be made until, in the developer’s earlier-filed arbitration action, the 

arbitrator determines whether the developer had validly terminated an 

underlying “prime contract” with its general contractor, and thus had 

validly accepted assignment of a “master subcontract” containing the 

arbitration agreement which the developer seeks to enforce.

We agree with the surety’s argument. We therefore reverse the circuit 

court’s order granting the developer’s motion to compel the surety’s 

declaratory judgment action to arbitration. We remand with directions to 

the circuit court to stay the surety’s declaratory judgment action until, in 

the developer’s earlier-filed arbitration action, the arbitrator determines
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whether the developer validly accepted assignment of the “master 

subcontract,” and thus whether a valid arbitration agreement exists 

between the developer and the surety. 

Background 

1. The Tangled Web of Contracts Involved in this Case 

The complicated nature of this appeal arises from the three interrelated 

contractual relationships underlying this case. 

First, the developer and the general contractor (“the GC”) entered into 

the “prime contract” for constructing a residential community project. 

Second, the GC entered into a master subcontract and two job-specific 

subcontracts with a land development subcontractor (“the sub”). 

Third, the sub obtained performance bonds from the surety covering 

the two job-specific subcontracts. The performance bonds incorporate the 

two job-specific subcontracts by reference. The performance bonds also 

provide that if the sub defaults on its performance under either of the two 

job-specific subcontracts, the GC is owed the payment under the bonds. 

 

Both the prime contract and the master subcontract provide that if the 

developer terminates the prime contract for cause, the developer may take 

assignment of the master subcontract from the GC upon the developer 

giving notice to the GC and the sub. Both the prime contract and the 

master subcontract also provide that upon the developer giving such 

notice, the developer would be owed payment under the surety’s 

performance bonds. 

Further complicating this case is that the prime contract, the master 

subcontract, and the performance bonds each provide for a different 

dispute resolution process. 

The prime contract provides that any claim or dispute between the 

developer and the GC “arising out of or relating to” the prime contract shall 

be submitted to binding arbitration under the American Arbitration 

Association’s (“AAA”) Construction Industry Rules. A third party may be 

joined into such binding arbitration only with that third party’s consent. 

The master subcontract provides that, at the GC’s sole discretion, any 

claim or dispute “arising out of, relating or and/or in any way connected 

with” the two job-specific subcontracts shall be resolved by binding 
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arbitration under the AAA’s Construction Industry Rules. The master 

subcontract also provides the arbitrator shall decide “[a]ny disputes 

concerning the interpretation or the enforceability of th[e] [master 

subcontract’s] arbitration agreement,” including “the scope of arbitrable 

issues.”

The surety’s performance bonds do not contain an arbitration 

agreement. Instead, the performance bonds provide that “[a]ny 

proceeding, legal or equitable, under [the performance bonds] may be 

instituted in any court of competent jurisdiction in the location in which 

the work or part of the work is located.” As stated above, the performance 

bonds also expressly incorporate the two job-specific subcontracts.

2. The Dispute Leading to the Developer’s Earlier-Filed Arbitration Action

One day, the GC sent the developer a notice terminating the prime 

contract for cause, citing the developer’s alleged nonpayment under the 

prime contract. Later that day, the developer sent the GC a notice 

terminating the prime contract for cause, citing the GC’s alleged various 

breaches under the prime contract.

The next day, the developer notified the GC and the sub that the 

developer had terminated the prime contract and was accepting 

assignment of the master subcontract.

A few days later, the developer notified the surety that the sub was in 

default under the two job-specific subcontracts and, therefore, demanded 

the surety pay the developer under the surety’s performance bonds.

The surety responded it needed to investigate whether the developer

was a proper claimant under the performance bonds, and whether

conditions precedent to asserting a claim under the performance bonds

had been satisfied.

During the surety’s investigation, the sub took the position that the 

developer did not have any payment rights under the performance bonds. 

The sub claimed the GC’s termination of the prime contract—which had 

preceded the developer’s purported termination of the prime contract later 

that day—had effectively terminated the two-job specific subcontracts, 

invalidated the bonds, and precluded the developer from accepting

assignment of the master subcontract or replacing the GC as being owed 

payment under the bonds.
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The developer then submitted to the AAA a demand for arbitration 

against the GC, the sub, and the surety. The developer’s demand sought 

to enforce the arbitration agreements in both the prime contract and the 

master subcontract. The developer’s demand also sought to recover 

damages for the GC’s alleged breaches of the prime contract, the sub’s 

alleged breaches of the two job-specific subcontracts, and the surety’s 

non-payment under the performance bonds. The developer’s demand 

further sought a declaratory judgment on three issues: (1) whether the 

GC’s termination of the prime contract was improper; (2) whether the 

developer’s termination of the prime contract for cause and acceptance of 

the master subcontract’s assignment were valid; and (3) whether the 

surety owed payment to the developer under the performance bonds for 

the sub’s alleged breaches of the two job-specific subcontracts.

3. Last But Not Least, the Surety’s Circuit Court Declaratory Judgment 

Action, and the Developer’s Motion to Compel that Action to Arbitration

The surety then filed, in the circuit court, a declaratory judgment action 

naming the developer as the sole defendant. The surety sought a 

declaratory judgment on three issues: (1) whether the developer was a

proper claimant under the performance bonds, because the GC had

terminated the prime contract before the developer had sought to do so, 

thus preventing the developer from accepting assignment of the master 

subcontract; (2) if the developer was a proper claimant under the 

performance bonds, whether the surety owed payment under the 

performance bonds because the developer had failed to satisfy conditions 

precedent to asserting a claim under the performance bonds; and (3) if no 

valid arbitration agreement existed between the surety and the developer, 

whether the developer’s earlier-filed arbitration action had to be stayed 

against the surety.

In response to the surety’s declaratory judgment action, the developer

filed in the circuit court a motion to compel the surety’s declaratory 

judgment action to arbitration, pursuant to the master subcontract’s 

arbitration agreement. The developer argued it could enforce the master 

subcontract’s arbitration agreement because the developer, after 

terminating the prime contract for cause, had accepted assignment of the 

master subcontract. The developer also argued even though the 

performance bonds facially provided that disputes arising under the 

performance bonds must be resolved in court, the surety was bound by 

the master subcontract’s arbitration agreement, because the performance 

bonds incorporated the two job-specific subcontracts. 
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Addressing the surety’s requested issues for the circuit court’s 

declaratory judgment consideration, the developer argued whether it had 

validly terminated the prime contract, and thus had validly accepted the 

master subcontract’s assignment, should be determined in the developer’s

earlier-filed arbitration action. According to the developer, allowing that

issue to be relitigated in the surety’s later-filed declaratory judgment

action would risk inconsistent outcomes. Thus, the developer argued, the 

circuit court should compel the surety to litigate that issue in the 

developer’s earlier-filed arbitration action.

In reply, the surety argued the circuit court, not the arbitrator, should 

determine whether a valid arbitration agreement exists between the surety 

and the developer. The surety argued the circuit court could not determine 

that issue until, in the developer’s earlier-filed arbitration action, the 

arbitrator determines whether the developer had validly terminated the 

prime contract, and thus had validly accepted assignment of the master 

subcontract containing the arbitration agreement which the developer 

seeks to enforce. According to the surety, unless and until the arbitrator 

makes that determination in the developer’s favor, no arbitration 

agreement exists between the surety and the developer.

Alternatively, the surety argued even if a valid arbitration agreement 

exists between the surety and the developer under the master subcontract, 

the first two issues for which the surety sought the circuit court’s 

declaratory judgment—whether the developer was a proper claimant 

under the performance bonds, and whether the developer had failed to 

satisfy conditions precedent to asserting a claim under the performance 

bonds—were not arbitrable. According to the surety, those two issues 

arose under the performance bonds which, as stated above, provide that 

“[a]ny proceeding, legal or equitable, under [the performance bonds] may 

be instituted in any court of competent jurisdiction in the location in which 

the work or part of the work is located.”

At the end of a non-evidentiary hearing, the circuit court orally granted

the developer’s motion to compel the surety’s declaratory judgment action 

to arbitration. The circuit court found a valid arbitration agreement exists

between the surety and the developer, because the surety’s performance 

bonds incorporated the prime contract, which contained an arbitration 

agreement. According to the circuit court, the performance bonds

incorporated “the construction contract” and not “the subcontract[s] only.”

After the hearing, the circuit court entered a written order granting the 

developer’s motion to compel the surety’s declaratory judgment action to 

arbitration and staying the action pending the arbitration’s outcome. The 
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written order deferred to the arbitrator’s determination whether the 

surety’s defenses to payment under the performance bonds were 

arbitrable. 

This Appeal 

This appeal followed. The surety argues the circuit court erred in 

determining a valid arbitration agreement exists between the surety and 

the developer. The surety argues such a determination cannot be made 

until, in the developer’s earlier-filed arbitration action, the arbitrator 

determines whether the developer had validly terminated the prime 

contract, and thus had validly accepted assignment of the master 

subcontract containing the arbitration agreement which the developer 

seeks to enforce. 

The developer responds the circuit court properly determined a valid 

arbitration agreement exists between the surety and the developer. 

However, the developer’s response does not rely upon the circuit court’s 

stated basis that the surety’s performance bonds incorporated the prime 

contract, which contains an arbitration agreement. Instead, the developer 

relies upon the performance bonds having incorporated the master 

subcontract, which contains its own arbitration agreement. 

Our review is de novo. See Dewees v. Johnson, 329 So. 3d 765, 769 

(Fla. 4th DCA 2021) (“An order granting or denying a motion to compel 

arbitration is reviewed de novo when it presents a pure question of law.”) 

(citation and internal quotation marks omitted). 

Applying de novo review, we agree with the surety’s argument that a 

determination of whether a valid arbitration agreement exists between the 

surety and the developer cannot be made until, in the developer’s earlierfiled arbitration action, the arbitrator determines whether the developer 

had validly terminated the prime contract, and thus had validly accepted 

assignment of the master subcontract containing the arbitration 

agreement which the developer seeks to enforce. 

A court reviewing a motion to compel arbitration must consider three 

elements: (1) whether a valid written agreement to arbitrate exists; (2) 

whether an arbitrable issue exists; and (3) whether the right to compel 

arbitration has been waived. Seifert v. U.S. Home Corp., 750 So. 2d 633, 

636 (Fla. 1999). 

Generally, the court, rather than the arbitrator, determines whether a 

valid arbitration agreement exists between the parties and whether their 
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dispute is within the scope of the agreement. See § 682.02(2), Fla. Stat.

(2022) (“The court shall decide whether an agreement to arbitrate exists or 

a controversy is subject to an agreement to arbitrate.”); Shotts v. OP Winter 

Haven, Inc., 86 So. 3d 456, 471 (Fla. 2011) (“[T]his Court in Seifert held 

that it was for the court, not the arbitrator, to determine whether a valid 

written agreement to arbitrate exists[.]”) (citation and internal quotation 

marks omitted). 

However, the parties’ agreement may allow the arbitrator, rather than 

the court, to decide those issues. See Airbnb, Inc. v. Doe, 336 So. 3d 698, 

703 (Fla. 2022) (“The United States Supreme Court has ‘recognized that 

parties can agree to arbitrate gateway questions of arbitrability, such as 

whether the parties have agreed to arbitrate or whether their agreement 

covers a particular controversy.’”) (quoting Rent-A-Ctr., W., Inc. v. Jackson, 

561 U.S. 63, 68-69, 130 S. Ct. 2772, 177 L. Ed. 2d 403 (2010)) (other 

internal quotation marks omitted). 

Here, the master subcontract’s arbitration agreement, in two respects,

plainly delegates arbitrability determinations to an arbitrator. First, the 

agreement expressly incorporates the AAA’s Construction Industry Rules, 

which expressly delegate arbitrability determinations to an arbitrator. See 

Airbnb, 336 So. 3d at 704 (“[I]ncorporation by reference of the AAA Rules 

that expressly delegate arbitrability determinations to an arbitrator clearly 

and unmistakably evidences the parties’ intent to empower an arbitrator 

to resolve questions of arbitrability.”). Second, the agreement states an 

arbitrator shall decide “[a]ny disputes concerning the interpretation or the 

enforceability of th[e] [master subcontract’s] arbitration agreement,” 

including “the scope of arbitrable issues.” 

Thus, the circuit court erred in determining a valid arbitration 

agreement exists between the surety and the developer, rather than 

deferring that determination to the arbitrator. Further, as the surety 

argues, such a determination cannot be made until, in the developer’s 

earlier-filed arbitration action, the arbitrator determines whether the 

developer had validly terminated the prime contract, and thus had validly 

accepted assignment of the master subcontract containing the arbitration 

agreement which the developer seeks to enforce. 

If the arbitrator in the developer’s earlier-filed arbitration action 

determines the developer did not validly terminate the prime contract, and 

thus could not validly accept assignment of the master subcontract 

containing the arbitration agreement which the developer seeks to enforce, 

then it logically follows the arbitrator will determine the master 
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subcontract’s arbitration agreement cannot serve as a valid arbitration 

agreement between the surety and the developer. 

Conversely, if the arbitrator in the developer’s earlier-filed arbitration 

action determines the developer validly terminated the prime contract, and 

thus validly accepted assignment of the master subcontract containing the 

arbitration agreement which the developer seeks to enforce, then it 

logically follows the arbitrator will determine the master subcontract’s 

arbitration agreement can serve as a valid arbitration agreement between 

the surety and the developer. 

 

The developer misplaces its reliance on several cases holding that when 

a surety’s performance bond incorporates an underlying contract 

containing an arbitration agreement, the surety will be bound to that 

arbitration agreement. See St. Paul Fire & Marine Ins. Co. v. 

Woolley/Sweeney Hotel No. 5, 545 So. 2d 958, 958-59 (Fla. 4th DCA 1989); 

Henderson Inv. Corp. v. Int’l Fid. Ins. Co., 575 So. 2d 770, 772 (Fla. 5th 

DCA 1991); Argonaut Ins. Co. v. Collage Design & Constr. Grp., Inc., No. 

6:22-CV-1055-RBD-DAB, 2022 WL 4485962, at *4-7 (M.D. Fla. Sept. 12, 

2022), adopted, 2022 WL 4483711 (M.D. Fla. Sept. 27, 2022). 

The developer’s reliance on those cases is misplaced because, in those 

cases, no dispute existed that the party seeking to enforce the contract’s 

arbitration agreement was a party to the contract. See Woolley/Sweeney, 

545 So. 2d at 958-59; Henderson, 575 So. 2d at 771; Argonaut, 2022 WL 

4485962, at *1-2. 

Here, however, the developer seeks to enforce the master subcontract’s 

arbitration agreement even though, in the developer’s earlier-filed 

arbitration action, the arbitrator has yet to determine whether the 

developer validly terminated the prime contract, and thus validly accepted 

assignment of the master subcontract. Unless and until the arbitrator 

makes those determinations in the developer’s favor, the developer is not 

a party to the master subcontract and has no basis to seek to enforce the 

arbitration agreement against the surety. 

Conclusion 

Based on the foregoing, we reverse the circuit court’s order granting the 

developer’s motion to compel the surety’s circuit court declaratory 

judgment action to arbitration. We remand with directions to the circuit 

court to stay the surety’s declaratory judgment action until, in the 

developer’s earlier-filed arbitration action, the arbitrator determines 

whether the developer validly accepted assignment of the master 
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subcontract, and thus whether a valid arbitration agreement exists 

between the developer and the surety.

Reversed and remanded with directions.

MAY and CONNER, JJ., concur.

* * *

Not final until disposition of timely filed motion for rehearing.