NOT FINAL UNTIL TIME EXPI RES TO FILE REHEARING MOTION AND, IF FILED, DETERMINED

IN THE DISTRICT COURT OF APPEAL OF FLORIDA SECOND DISTRICT

REGINALD ANDERSO N and MICHELLE ) ANDERSON, ) ) Appellants, ) ) v. ) Case No. 2D16-314 ) TAYLOR MORRISON OF FLORIDA, INC., ) ) Appellee. ) ___________________________________ ) Opinion filed May 31, 2017. Appeal Pursuant to Fla. R. App. P. 9.130 from the Circuit Court for Hillsborough County; Cheryl K. Thomas, Judge.

Matthew L. Wilson and Joshua E. Burnett of Burnett Wilson Reeder, Tampa, for Appellants. J. Carlton Mitchel and Neal A. Sivyer of Sivyer Barlow & Watson, P.A., Tampa, for Appellee.

SILBERMAN, Judge. Reginald and Michelle Anderson appeal a nonfinal order that st ays proceedings in the trial court and compels arbitration in this action against their home builder, Taylor Morrison of Florida, Inc. (the Builder). Becau se the arbitration provision contained in the limited warranty (the Warranty) that the Build er provided to the- 2 - Andersons limits their statutory remedies, we conclude that the provision is void as against public policy. Therefore , we reverse the trial court's order and remand for further proceedings. Based on this disposition, we do not reac h the remaining issue the Andersons raise of unconscionability. In April 2009, the Andersons entered into a sales agreement wi th the Builder to purchase a home. The Andersons took possession of t he home in November 2009. In June 2015, the Andersons provided notice to the Build er pursuant to section 558.004, Florida Statutes (2015), of construction defects based on building code violations. The notice referred to an attached engineering rep ort and stated that the report found "construction defects associated with the applicat ion of the exterior stucco system to [the Andersons'] home." The report specified that th e installation failed to meet the applicable building code provisions and that at multip le locations the cladding material had an inadequate thickness. Unable to resolve the matter, the Andersons filed a three-coun t complaint in September 2015 alleging (1) violation of the Florida Buildin g Code under section 553.84, Florida Statutes (2009); (2) breach of contract; and (3 ) violation of the Florida Deceptive and Unfair Trade Practices Act (FDUTPA), §§ 501.201-. 213, Fla. Stat. (2009). The Andersons alleged that the Builder violated the bu ilding code "by inadequately and improperly installing the stucco system on" th eir home. They claimed that the code violations were latent and not readily observable or known to them "until damages began to manifest themselves in the form of cracking to the exterior stucco years after construction ended." They also alleged that the Bu ilder knew or should have- 3 - known that the building code was violated during the constructi on of the home and that the violations caused damages to them. The Builder sought to compel arbitration on the basis of a pro vision in the Warranty provided with the purc hase of the home. The Andersons argued that the arbitration provision was void as against public policy because it barred recovery of all statutory and contractual claims and that it was unconscionable . After a hearing, the trial court granted the motion to compel arbitration and found the arbitration provision valid. In doing so, the trial court appeared to implicitly rej ect the argument that the provision was void as against public policy. The Andersons now challenge the order compelling arbitration, focusing on the statutory remedy for th e alleged building code

violations. The sales agreement between the parties states that the Builde r will provide the Andersons with a warranty in place of all other war ranties, including those arising under state law. After c losing, the Builder's sole res ponsibility "is to cover items under warranty." The Builder provided a copy of the three-page Warranty with the sales agreement. The Andersons signed an acknowledgement that they h ad received the copy, reviewed it, and agreed to its terms and conditions. The Warranty includes a oneyear warranty providing that materials and workmanship in the h ome will be in compliance with the review criteria that are contained in "the Customer Care Guidelines," a separate document . The Warranty also includes a ten-year warranty for "Major Structural Issues" as defined in the document. Based on the definition of major structural defect in the Warr anty, which includes items such as foundation systems, load-bearing beams, and bearing walls, the- 4 - inadequate application of exterior stucco does not appear to fa ll within the coverage of the ten-year limited warranty. The one-year limited warranty a ddresses stucco finishes by reference to the review criteria, which provides that small cracks are common and that cracks that exceed one-eighth inch in width "are considere d excessive" and are covered. The warranty does not otherwise address the proper ap plication of stucco, including any required thickness. The complaint and notice all ege violations of the building code based on improper application of stucco but do no t specifically address whether the cracks in the home fall within the one-year warrant y's definition of excessive. Rather, the Andersons asserted that the building co de violations were not readily observable or known until the cracking appeared well af ter the one-year warranty expired. With respect to arbitration, the Warranty contains an arbitrat ion provision on the third page in a section titled Dispute Settlement. That section provides as

follows: Dispute Settlement This Dispute Settlement provision sets forth the exclusive remedy for all disputes, claims or controversies arising out of, or in any manner related to, this Warranty or any alleged issues in your home or property. All disputes, claims or controversies which cannot be resolved between TM [the Builder] and you shall be submitted by you, not later than ninety (90) days after the expiration of the applicable warranty period, to the American Arbitration Association ("Arbitrator") for resolution in accordance with the rules and regulations of the Arbitrator. The final decision of the Arbitrator shall be binding on all parties and shall include final decisions relating to enforcement of the terms and provisions of this Warranty.- 5 - In addition, at the top of page one a statement in all capitals advises that the Warranty contains a binding arbitration pr ovision, that the consumer sho uld read the document in its entirety, and that the document contains exclusions. The Warranty also contains a lengthy disclaimer of liability p rovision before the dispute settlement section. At the end of the discl aimer provision it states as

follows:

BUYER AGREES THAT TH IS LIMITED WARRANTY SHALL BE THE EXCLUSIVE REMEDY FOR ANY ISSUES IN DESIGN, MATERIALS OR WORKMANSHIP. BUYER HERBY [sic] ASSUMES THE RISK OF ALL OTHER LOSS RESULTING FROM SUCH ISSUES, INCLUDING ANY CLAIMS FOR PROPERTY DAMAGE OR PERSONAL INJURY, AND WAIVE [sic] ALL OTHER CLAIMS, WHETHER IN CONTRACT, TORT OR OTHERWISE.

The Andersons contend that the ar bitration provision, particula rly when viewed in

context with the limitation of remedies contained in the discla imer provision, is void as against public policy because it prohibits any remedy, whether in tort, contract, or by statute, apart from items covered by the Warranty. It is for the court, not the arbitrator, to determine whether a valid arbitration agreement exists. Shotts v. OP Winter Haven, Inc., 86 So. 3d 4 56, 459 (Fla. 2011). Our review of the validity of an arbitration agreement on the c hallenge that it violates public policy is a question of law subject to de novo review. Id. at 471. If an arbitration agreement violates public policy, then no valid agreement exist s. Id. at 465; Global Travel Mktg., Inc. v. Shea, 908 So. 2d 392, 398 (Fla. 2005) ("N o valid agreement exists if the arbitration clause is unenforceable on public policy gro unds."). An arbitration agreement is unenforceable for public policy re asons when it defeats the remedial purpose of a statute or prohibits the p laintiff from obtaining- 6 - meaningful relief under the stat utory scheme. S.D.S. Autos, In c. v. Chrzanowski, 976 So. 2d 600, 606 (Fla. 1st DCA 2007) (dealing with FDUTPA). "A remedial statute is one which confers or changes a remedy." Shotts, 86 So. 3d at 473 ( quoting Blankfeld v. Richmond Health Care, Inc., 902 So. 2d 296, 298 (Fla. 4th DCA 2 005)) (dealing with Nursing Home Residents' Rights Act). Section 553.84 is a remed ial statute because it provides relief for a person whose home has been built in viola tion of the building code, "[n]othwithstanding any other remedies available." The Builder contends that if the challenge is to the agreement as a whole but not specifically to the arbitration provision, the issue of the validity of the agreement is for the arbitrator to decide. See Buckeye Check Cashing, In c. v. Cardegna, 546 U.S. 440, 444, 449 (2006) (stating that the borrowers contended that the contract as a whole was invalid based on a usurious finance charge); Kaplan v. Divo sta Homes, L.P., 983 So. 2d 1208, 1210 (Fla. 2d DCA 2008) (stating that the purchase rs contended that the entire sales contract was void due to fraud); Hound Mounds, Inc . v. Finch, 153 So. 3d 368, 371 (Fla. 4th DCA 2014) (stating that the franchisee alleg ed the invalidity of the entire franchise agreement and did not specifically attack the arbitration provision). Here, though, the Andersons do not challenge the Warranty as a whole or the sales agreement pursuant to which it w as issued. Rather, they challe nge the arbitration provision because while it "sets forth the exclusive remedy for all disputes" arising from or related to the Warranty and all issues with the home or prop erty, it precludes their ability to pursue their statutory claim. The Builder also cites to Pulte Home Corp. v. Bay at Cypress C reek Homeowners' Ass'n, 118 So. 3d 957, 958 (Fla. 2d DCA 2013), in w hich this court- 7 - recognized that statutory claims for violation of a building co de can be subject to

arbitration. But there the arbi tration agreement applied to cl aims for breach of warranty and statutory claims. Id. Here, the sales agreement spec ifies that the Builder's respons ibility after closing is only as to items that are covered by the Warranty, a nd the disclaimer provision precludes any claims that are not covered by the Warr anty, "whether in contract, tort or otherwise." The arbitration provision states that "[t]his Dispute Settlement provision sets forth the exclusive remedy for all di sputes, claims or controversies arising out of" or related to the Warranty or iss ues with the home or property. The next sentence stat es that all unresolved "disput es, claims or controversies" must be submitted to arbitration. These provisi ons establish that the only remedy afforded to the Andersons through arbitration is for spe cified Warranty claims and that all other claims, including the Andersons' statutory c laims, are precluded.

Yet the Builder insists that despite the language in the docum ents, a nonwarranty claim could be brought and must be arbitrated. We can not agree. As this court stated in a case involving similar stucco claims, arbitra tion cannot be compelled where "the parties did not agree to arbitrate claims such as th ose presented here."

Nunez v. Westfield Homes of Fl a., Inc., 925 So. 2d 1108, 1109 ( Fla. 2d DCA 2006). In Nunez, the homeowners brought a claim alleging that the bui lder violated the building code by misapplying the exterior stucco. The builder moved to compel arbitration in accordance with its limited home warranty that required arbitration of unresolved warranty issues. Id. The court observed that th e limited warranty did not obligate the builder to conform the home to the applicable buil ding codes. Id. at 1110.- 8 - Moreover, while the warranty required the builder to repair ext erior cracks in stucco that exceeded one-eighth of an inch in width, the homeowners' claim was not based on that condition. Id. The warranty i n Nunez extended only to specifi ed circumstances, not including building code violations, and the builder "chose to l imit the scope of disputes subject to arbitration." Id. Here, the language of the arbitration provision is seemingly b roader than the arbitration language discuss ed in Nunez. The arbitration p rovision in the Warranty indicates that all issues related to the Warranty, the home, or the property are to be arbitrated. But read in context with other provisions in the W arranty, particularly the disclaimer provision, it is evident that the alleged building c ode violations cannot be remedied through arbitration because the claims are not covered by the Warranty and all non-Warranty claims are waived. As the Florida Supreme Cou rt stated in Shotts, "any arbitration agreement that substantially diminishes or cir cumvents these [statutory]

remedies stands in violation of the public policy of the State of Florida and is unenforceable." 86 So. 3d at 474. Simply put, the arbitration provision here effectively

limits the Andersons' remedies t o Warranty claims, as defined i n the documents, and does not just substantially diminish the Andersons' statutory r emedy for a violation of the building code but totally eliminates it. Moreover, contrary to the Builder's argument this is not a sit uation where the challenge is to the validity of the limited warranty contra ct as a whole. The Andersons do not allege that the contract is usurious or was en tered into based on fraud. See Buckeye Check Cashing, 546 U.S. at 444; Kaplan, 983 So. 2d at 1210.- 9 - Instead, they specifically challenged the arbitration provision because it precludes enforcement of a statutory remedy that is available to them. Because the arbitration provision limited the Andersons to war ranty claims and prevents their assertion of a statutory claim, the arbitrat ion provision violates public policy and is unenforceable. See Shotts, 86 So. 3d at 474-75. Accordingly, we reverse the order compelling arbitration and remand to the trial court for further proceedings on the Andersons' complaint.

Reversed and remanded.

KELLY and BLACK, JJ., Concur.