DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA

FOURTH DISTRICT

FALLANG FAMILY LIMITED PARTNERSHIP, individually and as 

assignee of HADELAND LIMITED PARTNERSHIP,

Appellant, 

v.

PRIVCAP COMPANIES, LLC, PRIVCAP FUNDING, LLC, PRIVCAP

HOLDINGS, LLC, PRIVCAP MANAGER, LLC, and DANIEL COHEN,

Appellees. 

No. 4D20-548

[March 24, 2021] 

Appeal of nonfinal order from the Circuit Court for the Fifteenth 

Judicial Circuit, Palm Beach County; James L. Martz, Judge; L.T. Case 

No. 50-2018-CA-008888-XXXX-MB. 

Jason Goldstein and Maria Piva of Goldstein & Company, Coral Gables,

for appellant. 

Douglas S. Allison and Steven K. Platzek of Graner Platzek & Allison, 

P.A., Boca Raton, for appellees. 

CONNER, J.

Fallang Family Limited Partnership (“FFLP”), the plaintiff below, 

appeals a nonfinal order granting without prejudice the motion to compel 

arbitration and stay proceedings filed by Privcap Companies, LLC, Privcap 

Holdings, LLC, Privcap Funding, LLC, Privcap Manager, LLC, and Daniel 

Cohen (collectively “the Privcap Appellees”) in a suit in which the Privcap 

Appellees are defendants, along with multiple other defendants. FFLP 

makes multiple arguments as to how the trial court erred, contending that 

none of the sixteen counts against the Privcap Appellees are subject to 

arbitration. We affirm without discussion all of the trial court’s rulings, 

except the issue raised as to whether reference to the American Arbitration 

Association (“AAA”) rules in an arbitration agreement can be sufficient to 

shift the authority to decide what disputes are arbitrable from the trial 

court to the arbitrator or arbitration panel. We also explain the limits of 

our opinion in Younessi v. Recovery Racing, LLC, 88 So. 3d 364 (Fla. 4th 

DCA 2012).
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Background

In the underlying action, FFLP brought a twenty-two count complaint 

against the Privcap Appellees and other defendants. FFLP was an investor

client of one or more of the Privcap Appellees. The Privcap Appellees hold 

themselves out as real estate investors, managers, and professionals. The 

Privcap Appellees are in the business of identifying, securing, and selling 

real estate investment opportunities to the public. All of the claims 

addressed in the rulings under review are against one or more of the 

Privcap Appellees, and the claims revolve around alleged breaches of two 

separate arrangements: (1) an equity investment; and (2) a separate loan 

made by FFLP to or through one or more of the Privcap Appellees. The two 

arrangements were in connection with the acquisition and management of 

a real estate portfolio consisting of various properties in Ohio (“Ohio 

Properties”).

According to FFLP’s complaint, the Privcap Appellees’ collective mission 

is to secure real estate investment opportunities for its clients. Appellee 

Daniel Cohen is the president and chief executive officer of the Privcap 

entities. The complaint alleges that Cohen holds himself out to be an 

expert on real estate investments, loans, and property management. FFLP 

claimed that all the Privcap entities are entirely governed and controlled 

by Cohen and the entities exercise no independence or discretion.

The Operating Agreement

The Operating Agreement was between FFLP and Privcap Holdings and 

no other persons or entities. Under the Operating Agreement, Privcap 

Holdings was to create a separate entity to use FFLP’s investment funds 

for purchasing and managing the Ohio Properties for “profit, income, and 

gain.” The Operating Agreement contained the following single paragraph 

arbitration provision:

12.10 Arbitration. In the event of any dispute under this 

agreement the parties agree to submit to binding arbitration 

in the state of Florida with a panel of one arbitrator. The 

arbitrator shall be chosen by the AAA and the AAA rules and 

procedure shall apply, and the arbitration will be governed by 

the law of the state of Florida.

The Servicing Agreement
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Almost a year before FFLP entered into the Operating Agreement, FFLP 

and Privcap Funding entered into the Servicing Agreement. The Servicing 

Agreement was intended to govern multiple secured loans FFLP made to 

third parties through Privcap Funding. Under the Servicing Agreement, 

Privcap Funding was responsible for servicing, administering, and 

managing the secured loan opportunities Privcap Funding procured for 

FFLP. One of the loans covered by the agreement was a one-million-dollar 

loan FFLP made through Privcap Funding to certain other defendants in 

connection with the acquisition of the Ohio Properties. The Servicing 

Agreement did not contain an arbitration clause.

Allegations of Fraud and Wrongdoing Against the Privcap Appellees

Sixteen of the twenty-two counts of the complaint were against one or 

more of the Privcap Appellees (the remaining counts were against other 

defendants). As to the Privcap Appellees, FFLP alleged it discovered that 

they had made multiple misrepresentations to FFLP in an effort to induce 

FFLP to transfer its funds to one or more of the Privcap Appellees for 

specific purposes that were never fulfilled. FFLP also discovered that one 

or more of the Privcap Appellees and other defendants improperly 

managed the investments and loans made by FFLP and entered into 

mortgages using FFLP’s funds—all while securing interests in favor of one 

or more of the Privcap Appellees. FFLP alleged that the Privcap Appellees’ 

actions and inactions rose to the level of fraud and negligence, including 

breaches of their duties under common law and various statutes.

The Motions to Compel Arbitration and Stay

In response to the complaint, the Privcap Appellees filed a motion to 

compel arbitration and stay portions of the proceedings. The appellees 

claimed, “[a]lthough [FFLP] has attempted to bring as many causes of 

action against as many Defendants as it could come up with, the 

underlying investments are governed by or relate to an Operating 

Agreement . . . which contains a clause requiring [FFLP] to arbitrate its 

claims rather than bringing litigation.” 

After a hearing, the court found that fourteen of the sixteen counts 

against the Privcap Appellees were arbitrable because “they are either 

wholly related to the Operating Agreement or tangentially related to the 

Operating Agreement through the Servicing Agreement between [FFLP]

and Privcap Funding.” The trial court made its findings “without prejudice 

to the arbitrator to make determinations as to which claims are arbitrable 

based on a more detailed factual presentation by the Parties as to why 

some of those counts listed in . . . this Order may not be related to the 
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arbitration clause of the Operating Agreement.” The trial court stayed all 

remaining claims it determined were not subject to arbitration. The stay 

was imposed until the conclusion of arbitration.

FFLP gave notice of this nonfinal appeal.

Appellate Analysis

Generally, review of an order on a motion to compel arbitration is de 

novo. Hernandez v. Crespo, 211 So. 3d 19, 24 (Fla. 2016); Wilson v. 

AmeriLife of E. Pasco, LLC, 270 So. 3d 542, 545 (Fla. 2d DCA 2019). Issues 

of contract interpretation are also subject to de novo review. Fla. Inv. Grp.

100, LLC v. Lafont, 271 So. 3d 1, 4 (Fla. 4th DCA 2019). If there is a 

dispute over what issues or controversies are within the scope of an 

arbitration agreement, courts will generally resolve the dispute “in favor of 

arbitration.” Jackson v. Shakespeare Found., Inc., 108 So. 3d 587, 593 

(Fla. 2013).

“Arbitration provisions are creatures of contract and must be construed 

‘as a matter of contract interpretation.’” Doe v. Natt, 299 So. 3d 599, 605 

(Fla. 2d DCA 2020) (quoting Seifert v. U.S. Home Corp., 750 So. 2d 633, 

636 (Fla. 1999)). “‘When interpreting a contract, the court must first 

examine the plain language of the contract for evidence of the parties’ 

intent.’ . . . ‘Intent unexpressed will be unavailing. . . .’” Beach Towing 

Servs., Inc. v. Sunset Land Assocs., LLC, 278 So. 3d 857, 860 (Fla. 3d DCA 

2019) (first quoting Perez-Gurri Corp. v. McLeod, 238 So. 3d 347, 350 (Fla. 

3d DCA 2017); and then quoting Moore v. Stevens, 106 So. 901, 903 (Fla.

1925)).

The Supreme Court of the United States has noted that “who—court or 

arbitrator—has the primary authority to decide whether a party has agreed 

to arbitrate can make a critical difference to a party resisting arbitration.” 

First Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 942 (1995). The Court 

has explained:

This Court, however, has (as we just said) added an important 

qualification, applicable when courts decide whether a party 

has agreed that arbitrators should decide arbitrability: Courts 

should not assume that the parties agreed to arbitrate 

arbitrability unless there is ‘clea[r] and unmistakabl[e]’

evidence that they did so. In this manner the law treats 

silence or ambiguity about the question ‘who (primarily) 

should decide arbitrability’ differently from the way it treats 

silence or ambiguity about the question ‘whether a particular 
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merits-related dispute is arbitrable because it is within the 

scope of a valid arbitration agreement’—for in respect to this 

latter question the law reverses the presumption.

. . . .

On the other hand, the former question—the ‘who (primarily) 

should decide arbitrability’ question—is rather arcane. A 

party often might not focus upon that question or upon the 

significance of having arbitrators decide the scope of their own 

powers. And, given the principle that a party can be forced to 

arbitrate only those issues it specifically has agreed to submit 

to arbitration, one can understand why courts might hesitate 

to interpret silence or ambiguity on the ‘who should decide 

arbitrability’ point as giving the arbitrators that power, for 

doing so might too often force unwilling parties to arbitrate a 

matter they reasonably would have thought a judge, not an 

arbitrator, would decide.

Id. at 944–45 (first and second alteration in original) (emphases added) 

(citations omitted). The Court recently reaffirmed these principles in 

Henry Schein, Inc. v. Archer & White Sales, Inc., 139 S.Ct. 524 (2019), when 

it cited First Options for the proposition: “This Court has consistently held 

that parties may delegate threshold arbitrability questions to the 

arbitrator, so long as the parties’ agreement does so by ‘clear and 

unmistakable’ evidence.” Id. at 530 (quoting First Options, 514 U.S. at 

944). Applying the Federal Arbitration Act to the context of an arbitration 

agreement, the Court in Henry Schein said: “We must interpret the Act as 

written, and the Act in turn requires that we interpret the contract as 

written. When the parties’ contract delegates the arbitrability question to 

an arbitrator, a court may not override the contract.” Id. at 529. 

Although there is scant discussion in the briefs by the parties in this 

case, we note that section 682.02, Florida Statutes (2018), contains 

“gatekeeper” provisions allocating arbitrability issues between court and 

arbitrator:

(1) An agreement contained in a record to submit to arbitration 

any existing or subsequent controversy arising between the 

parties to the agreement is valid, enforceable, and irrevocable 

except upon a ground that exists at law or in equity for the 

revocation of a contract.
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(2) The court shall decide whether an agreement to arbitrate 

exists or a controversy is subject to an agreement to arbitrate.

(3) An arbitrator shall decide whether a condition precedent to 

arbitrability has been fulfilled and whether a contract 

containing a valid agreement to arbitrate is enforceable.

§ 682.02, Fla. Stat. (emphases added). Thus, by statute in Florida, the 

court decides what controversies are subject to an arbitration agreement, 

however, by contract, the parties can shift that authority to the arbitrator. 

Id. What First Options and Henry Schein make clear is that the contract 

language shifting the authority to decide what controversies are arbitrable 

from the court to the arbitrator must provide “clear and unmistakable 

evidence” of that intent, and ambiguity as to “who decides” reverses the 

usual presumption from the arbitrator to the court. Henry Schein, 139 S. 

Ct. at 530; First Options, 514 U.S. at 944–45. Stated another way, if the 

contract language is ambiguous, the normal presumption that favors 

decision making by the arbitrator is reversed, and the presumption 

becomes that the court decides what controversies are subject to 

arbitration. In sum, ambiguous contractual language does not change the 

statutory mandate that courts decide what controversies are subject to 

arbitration.

In this case, the arbitration agreement in the Operating Agreement is 

one paragraph. Notably, the agreement makes reference to “AAA” and 

“AAA rules and procedure.” Importantly, the Operating Agreement did not 

attach any portions of the AAA rules or explain where those rules could be 

found. Nor did the arbitration paragraph identify which subject-area 

version of the AAA rules apply. The Privcap Appellees contend the AAA 

Commercial Arbitration Rules are applicable to this case, and in particular 

rule R-7. Jurisdiction, which provides:

(a) The arbitrator shall have the power to rule on his or her own 

jurisdiction, including any objections with respect to the 

existence, scope, or validity of the arbitration agreement or to 

the arbitrability of any claim or counterclaim.

(b) The arbitrator shall have the power to determine the 

existence or validity of a contract of which an arbitration 

clause forms a part. Such an arbitration clause shall be treated 

as an agreement independent of the other terms of the contract. 

A decision by the arbitrator that the contract is null and void 

shall not for that reason alone render invalid the arbitration 

clause.
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Am. Arb. Ass’n, Commercial Arbitration Rules and Mediation Procedures, 13 

(Oct. 1, 2013) http://www.adr.org/sites/default/files/Commercial-RulesWeb.pdf (emphases added). As can be seen, AAA Commercial Arbitration 

Rule R-7. gives the arbitrator the authority to decide what issues and 

controversies are within the scope of the arbitration agreement, an 

authority the arbitrator would not have directly under section 682.02(2).

However, similar to Natt, the issue we confront in this case is whether 

contract language incorporating a set of arbitration rules by general 

reference, rather than by reference to a specific rule granting authority to 

decide what is arbitrable, “clearly and unmistakably” supplants a court’s 

statutory power to decide what is arbitrable. Adopting the reasoning of 

the Second District in Natt, we hold that on the facts of this case, the 

general reference to “AAA rules” did not “clearly and unmistakably” 

supplant the trial court’s authority to decide what is arbitrable. We also 

take this opportunity to explain the limits of our opinion in Younessi.

In Younessi, the issue we confronted was the propriety of a trial court 

order directing the parties to select an arbitrator. Younessi, 88 So. 3d at

365. The appellant contended that the trial court improperly ignored the 

provision of the arbitration agreement that specifically stated that 

arbitration would be in accordance with AAA rules. Id. In a brief opinion 

without a lot of factual detail, we reversed the trial court’s order directing 

the parties to select an arbitrator because the arbitration agreement stated 

arbitration would be conducted in accordance with AAA rules, and the AAA 

rules had a procedure for selecting the arbitrator. Id. at 366. Significantly, 

we said: “Where language of the contract clearly indicates that AAA rules 

govern, they are expressly incorporated into the contract,” citing to

Terminix International Co., LP v. Palmer Ranch Ltd. Partnership, 432 F.3d 

1327, 1333 (11th Cir. 2005), as authority. Id. at 365. The citation to 

Terminix in Younessi is important to our decision in this case because in 

Terminix, the arbitration agreement stated that “arbitration shall be 

conducted in accordance with the Commercial Arbitration Rules then in 

force of the American Arbitration Association.” 432 F.3d at 1332. The 

specific reference to “the Commercial Arbitration Rules” was important in 

Terminix because those rules contained “Rule 8(a),” which provided that 

“[t]he arbitrator shall have the power to rule on his or her own jurisdiction, 

including any objections with respect to the existence, scope or validity of 

the arbitration agreement.” Id. (citation omitted).

In Reunion West Development Partners, LLLP v. Guimaraes, 221 So. 3d 

1278 (Fla. 5th DCA 2017), the Fifth District confronted a home purchase 

agreement with an arbitration provision that provided arbitration would 
8

be conducted “in accordance with the Construction Industry Arbitration 

Rules of the American Arbitration Association (‘AAA’),” which the Fifth 

District noted had a “Jurisdiction” provision authorizing the arbitrator to 

rule on whether a dispute is within the scope of an arbitration agreement. 

Id. at 1279. The buyers “argued that the arbitration clause was not 

enforceable because there was no meeting of the minds and because its 

terms were unconscionable, citing to Basulto v. Hialeah Automotive, 141 

So. 3d 1145 (Fla. 2014).” Id. at 1279-80. The seller cited Glasswall, LLC 

v. Monadnock Construction, Inc., 187 So. 3d 248 (Fla. 3d DCA 2016), and 

“asserted that the issue of arbitrability was expressly reserved for the 

arbitrator to decide.” Id. at 1280.

Citing Younessi and Terminix, the Fifth District concluded that “[w]here, 

like here, the language of the contract clearly states that AAA rules govern, 

then said rules are expressly incorporated into the contract.” Id. Due to 

the specific reference to and applicability of the AAA Construction Industry 

Arbitration Rules, the Fifth District reversed the denial of the motion to 

compel arbitration and remanded for further proceedings. Id. Significant 

to our disposition in this case, the Fifth District distinguished the 

applicability of Basulto for three reasons, one of which was the fact that 

the arbitration provision in Basulto “did not incorporate the Construction 

Industry Arbitration Rules.” Id. It appears that the Fifth District in 

Guimares required more than a general reference to “AAA rules,” and 

instead relied on a reference to a specific subset of AAA rules as governing 

arbitration.

It also appears the Third District has agreed that a more specific 

reference to a subset of AAA rules is sufficient to vest the arbitrator with 

the authority to decide arbitrability. See Mia. Marlins, L.P. v. Miami-Dade 

Cty., 276 So. 3d 936, 940 (Fla. 3d DCA 2019) (finding that the arbitrator 

could determine arbitrability because the arbitration agreement stated 

arbitration would be conducted in accordance with the AAA Commercial 

Arbitration Rules); Glasswall, 187 So. 3d at 251 (same, due to reference 

to AAA Construction Industry Arbitration Rules).

As discussed above, in this case, the arbitration agreement was one 

paragraph stating merely that “the AAA rules and procedure shall apply.” 

There was no reference to any subset of the AAA rules. Like the Second 

District, we conclude that “the reference to the AAA Rules was broad, 

nonspecific, and cursory.” Natt, 299 So. 3d at 606. The AAA rules were 

not attached and no information was given as to where to find the rules. 

Id. Additionally, we agree that even if we were to assume that a general 

reference to “AAA rules” was sufficient to show an intent that the trial 

court’s authority could be supplanted, there is still the uncertainty of 
9

whether the parties did intend to supplant the trial court’s authority. We 

also agree with our sister court that AAA Commercial Arbitration Rule R7. language stating that the arbitrator “shall have the power” does not 

grant exclusive authority to the arbitrator. As the Second District has 

pointed out, “in most interpretive contexts, the statement, ‘shall have the 

power,’ does not even constitute a mandatory directive.” Id. at 607. Most 

importantly, we agree with the Second District that it is questionable 

whether the opinions by the Third and Fifth Districts and our own opinion 

in Younessi comports with the Supreme Court’s decisions in First Options

and Henry Schein. We also point out that Younessi, unlike Miami Marlins, 

Guimares, and Glasswall, involved applying AAA rules to selecting an 

arbitrator, and did not address the issue of “who decides” what is 

arbitrable. It is unknown how a panel of this Court would have ruled if 

the issue in Younessi was “who decides,” as between the trial court and an 

arbitrator.

We conclude that the general reference to the “AAA rules” in this case 

left ambiguity as to whether the arbitrator has authority to decide 

arbitrability to the exclusion of the trial court.

In that regard, we also distinguish our position from the Second 

District. As the dissent in Natt points out, the majority opinion seems to 

indicate that an arbitrator will have authority to decide arbitrability only 

if the contract language gives the arbitrator exclusive authority. Natt, 299 

So. 3d at 612 (Villanti, J., dissenting) (“Here, the majority has created a 

new requirement that the contract must confer an ‘exclusive’ power upon 

the arbitrator or arbitration panel to determine the arbitrability of an 

issue.”). As we see it, there can be instances, depending on the language 

of the arbitration agreement, in which the court and the arbitrator or 

arbitration panel can have concurrent jurisdiction to decide arbitrability. 

As such, we conclude that the trial judge’s order in this case properly made 

a preliminary decision as to which counts of the complaint are covered by 

the arbitration agreement, based on a limited showing of the facts in this 

multiple count, factually complex case, and properly left the final decision 

as to what was arbitrable to the arbitrator. On the facts of this case, we 

hold that such an approach is an efficient and economical manner to 

decide the multitudinous disputes in this case and does not violate the 

contract to arbitrate.

We also certify conflict with the decisions rendered by the Third District 

in Miami Marlins and Glasswall, and the Fifth District in Guimaraes.

Affirmed; Conflict Certified.
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CIKLIN, J., concurs.

DAMOORGIAN, J., dissents with opinion.

DAMOORGIAN, J., dissenting.

I dissent because the majority opinion directly conflicts with the 

precedent of this Court in Younessi v. Recovery Racing, LLC, 88 So. 3d 364 

(Fla. 4th DCA 2012). Our holding in Younessi could not have been clearer:

“Where language of the contract clearly indicates that AAA rules govern, 

they are expressly incorporated into the contract.” 88 So. 3d at 365 

(holding that even though the contract’s arbitration clause did not specify 

how the arbitrator was to be selected, “[t]he contract expressly stated that 

any dispute arising from it was to be arbitrated under AAA rules;” thus, as 

AAA rules had an established procedure for selecting an arbitrator, “AAA 

rules for the selection of an arbitrator should have been followed”); see also 

Reunion W. Dev. Partners, LLLP v. Guimaraes, 221 So. 3d 1278, 1280 (Fla. 

5th DCA 2017) (“Where, like here, the language of the contract clearly 

states that AAA rules govern, then said rules are expressly incorporated 

into the contract.”); Glasswall, LLC v. Monadnock Constr., Inc., 

187 So. 3d 248, 251 (Fla. 3d DCA 2016) (recognizing that “the majority of 

federal courts considering similar circumstances where the AAA’s 

arbitration rules have been incorporated by reference into a contract 

likewise have found that the parties sufficiently evidenced their intent to 

have arbitrators, not a court, hear and decide issues of arbitrability”).

* * *

Not final until disposition of timely filed motion for rehearing.