Third District Court of Appeal

State of Florida 

Opinion filed September 29, 2021.

Not final until disposition of timely filed motion for rehearing.

________________

Nos. 3D20-1154 and 3D20-1197

Lower Tribunal Nos. 20-2464, 20-2466

________________

BREA 3-2 LLC, etc., et al.,

Appellants,

vs.

Hagshama Florida 8 Sarasota, LLC, etc., et al.,

Appellees.

Appeals from the Circuit Court for Miami-Dade County, Beatrice 

Butchko, Judge.

Anthony & Partners, LLC, and John A. Anthony and Andrew J. Ghekas 

(Tampa), for appellants.

Levine Kellogg Lehman Schneider + Grossman LLP, and Stuart I.

Grossman and Matthew J. McGuane; D’Agostino, Levine, Landesman, 

Lederman, Rivera & Sampson, LLP, and Bruce H. Lederman (New York, 

NY), for appellees.

Before EMAS, LINDSEY and BOKOR, JJ. 

EMAS, J.
2

I. INTRODUCTION

In these consolidated appeals, plaintiffs below, BREA 3-2 LLC, 

Michael Bednarski, and Peggy Tseung (BREA), appeal two final orders 

compelling arbitration and dismissing—without prejudice—their lawsuits 

against Hagshama Florida 8 Sarasota, LLC and Hagshama Florida 10 

Orlando, LLC (Hagshama), defendants below. Although BREA raises a 

number of issues on appeal, we address primarily: (1) whether the trial court 

erred in finding that the underlying arbitration clause is a “broad” provision 

under the case law; and (2) whether the trial court erred in determining that 

the decision in Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 

445-46 (2006) required the parties to arbitrate the dispute. We hold that the 

trial court erred in both rulings, and reverse the orders compelling arbitration

and dismissing the action. 

We hold that the arbitration clause, by which the parties agreed to 

arbitrate any dispute “under the Agreement,” constitutes a narrow arbitration 

provision, and that the claims alleged in the complaint below (usury and 

related claims premised on an allegedly usurious loan) do not have the 

requisite “direct relationship” to the underlying agreement such that the 

parties agreed to arbitrate this dispute. 
3

In reversing on this basis, we agree with the strict holding of our sister

court in Party Yards, Inc. v. Templeton, 751 So. 2d 121 (Fla. 5th DCA 2000). 

In Party Yards, the Fifth District, construing a contract with a similarly narrow 

arbitration provision (providing that “any controversy arising under this 

Agreement shall be submitted to arbitration”), held that “the arbitration 

provision of the contract is not broad enough to encompass a usury violation” 

and that the statutory usury claim did not “arise under” the agreement but 

instead arose under Florida statutory law. Id. at 123. 

II. FACTUAL AND PROCEDURAL BACKGROUND

In 2015, BREA was formed to serve as general partner in certain real 

estate development projects. BREA developed business plans to acquire 

and develop two vacant pieces of land—one in Sarasota and one in Orlando. 

In 2016, to finance the development projects, BREA entered into two 

separate Agreements with Hagshama—one Agreement for each project. 

Relevant to our purposes, each of the Agreements contained the identical

arbitration provision:

Any dispute under this Agreement or any Exhibit attached 

hereto shall be submitted to arbitration under the American 

Arbitration Association (the “AAA”) in New York City, New York . 

. . .

(Emphasis added).
4

Attached to each Agreement was a Guaranty. Although individual 

appellants Michael Bednarski and Peggy Tseung (in their personal 

capacities) are not signatories to the Agreements, they are each (in their 

personal capacities) signatories to the Guaranty which are paginated as part 

of each Agreement. Also, each document references the other, i.e., the 

Guaranty confirms that the signatories “accept and agree to be bound” by 

the Agreement as if they were “a direct party to the Agreement,” and the 

Agreement requires appellants to personally guarantee (via the Guaranty) 

BREA’s “undertakings and obligations” under the Agreement.1 

When neither Project was completed prior to the maturity date in the 

Agreement, Hagshama sent notices of default and demand letters asserting 

that BREA breached or failed to meet the obligations under the Agreements. 

1 One of the arguments raised on appeal is that the trial court erred in 

enforcing the arbitration provision in the Agreement against appellants where 

they are not signatories to the Agreements. This argument misses the mark 

because, as detailed above, the Guaranty (to which appellants were 

signatories) expressly incorporated the terms of the Agreement. See Massa 

v. Michael Ridard Hosp. LLC, 306 So. 3d 1106, 1109 (Fla. 3d DCA 2020) 

(observing: “Nonsignatories have been held to be bound to arbitration 

agreements under the theories of (1) incorporation by reference; (2) 

assumption; (3) agency; (4) veil piercing/alter ego; and (5) estoppel.”) 

(quoting Liberty Comms., Inc. v. MCI Telecomms. Corp., 733 So. 2d 571, 

574 (Fla. 5th DCA 1999)). See also Perdido Key Island Resort Dev., L.L.P. 

v. Regions Bank, 102 So. 3d 1, 3 (Fla. 1st DCA 2012) (finding that the claim 

for foreclosure of the mortgage was arbitrable where, under the plain 

language of the contract, the mortgage explicitly incorporated the terms of 

the note).
5

In response, BREA filed the underlying state court actions against 

Hagshama—one as to the Sarasota Agreement and the other as to the 

Orlando Agreement—alleging, inter alia, that appellees were attempting to 

collect on two “criminally usurious debts” in violation of section 687.071, 

Florida Statutes (2016). The complaints sought: damages for usury under 

section 687.071 (Count I); declaratory relief, i.e., a declaration that the 

Agreements are illegal and unenforceable against appellants (Count II); and 

injunctive relief, i.e., enjoining appellees from enforcing the Agreements

(Count III). 

Hagshama moved to stay the action and compel arbitration and, in the 

alternative, to dismiss the action for improper venue. Hagshama maintained 

that the arbitration provision is broad, and relied on Buckeye, 546 U.S. at 

444-46, for the proposition that, because appellants’ usury claims challenged 

the “contract as a whole” as “void for illegality,” the claims must be 

“considered by an arbitrator, not a court.” BREA countered that Buckeye is 

distinguishable because the instant arbitration provision is “narrow,” as 

contrasted with the concededly broad arbitration provision in Buckeye. 

The trial court concluded that the arbitration clause “of the subject 

Agreement is broad, valid and enforceable;” ordered BREA to refile their 

claims in an arbitration proceeding before the AAA in New York, and 
6

pursuant to New York substantive law; and dismissed the cases without 

prejudice to any New York court proceedings “to enforce or reject any 

determination in arbitration.” This appeal followed.

III. DISCUSSION AND ANALYSIS2

In adopting section two of the Federal Arbitration Act,

3 “Congress 

declared a national policy favoring arbitration and withdrew the power of the 

states to require a judicial forum for the resolution of claims which the 

contracting parties agreed to resolve by arbitration.” Southland Corp. v. 

Keating, 465 U.S. 1, 10 (1984). 

Accordingly, “the first task of a court asked to compel arbitration of a 

dispute is to determine whether the parties agreed to arbitrate that dispute.” 

2 An order granting a motion to compel arbitration is reviewed de novo. Yam 

Exp. & Imp. LLC, v. Nicaragua Tobacco Imps., Inc., 298 So. 3d 1173, 1175 

(Fla. 3d DCA 2020). The interpretation of a contractual forum selection 

clause is also a question of law, which we review de novo. Am. Safety Cas. 

Ins. Co. v. Mijares Holding Co. LLC, 76 So.3d 1089 (Fla. 3d DCA 2011). 3 9 U.S.C. § 2 (entitled “Validity, irrevocability, and enforcement of 

agreements to arbitrate”) provides: 

A written provision in any maritime transaction or a contract 

evidencing a transaction involving commerce to settle by 

arbitration a controversy thereafter arising out of such contract or 

transaction, or the refusal to perform the whole or any part 

thereof, or an agreement in writing to submit to arbitration an 

existing controversy arising out of such a contract, transaction, 

or refusal, shall be valid, irrevocable, and enforceable, save upon 

such grounds as exist at law or in equity for the revocation of any 

contract.
7

All S. Subcontractors, Inc. v. Amerigas Propane, Inc., 206 So. 3d 77, 80-81 

(Fla. 1st DCA 2016) (quotation omitted). See also Seifert v. U.S. Home 

Corp., 750 So. 2d 633, 636 (Fla. 1999) (holding: “[N]o party may be forced 

to submit a dispute to arbitration that the party did not intend and agree to 

arbitrate.”) Arbitration provisions are “contractual in nature,” and, therefore, 

“[t]he intent of the parties to a contract, as manifested in the plain language 

of the arbitration provision and contract itself, determines whether a dispute 

is subject to arbitration.” Jackson v. Shakespeare Found., Inc., 108 So. 3d 

587, 593 (Fla. 2013).

Appellants contend that the trial court in the instant case overlooked

this “first task” and, instead, relied exclusively on what it perceived to be the

holding in Buckeye to grant the motion to compel arbitration of these usury 

claims. We agree. 

A. Buckeye

In Buckeye, 546 U.S. at 444, the plaintiffs alleged that “various 

deferred-payment transaction[]” agreements entered into with the defendant 

were “rendered invalid by the usurious finance charge.” The trial court 

denied defendant’s motion to compel arbitration of the claim. On appeal from 

the order denying the motion to compel arbitration, the Fourth District Court 

of Appeal reversed the trial court’s order, holding that the challenge to the 
8

underlying contract’s validity must be resolved by an arbitrator, not a trial 

court. Buckeye Check Cashing, Inc. v. Cardegna, 824 So. 2d 228 (Fla. 4th 

DCA 2002). The Florida Supreme Court quashed the Fourth District’s 

decision, holding that a challenge to the entire contract as void (usurious) 

was a question for the trial court, not an arbitrator. Cardegna v. Buckeye 

Check Cashing, Inc., 894 So. 2d 860 (Fla. 2005). The Florida Supreme 

Court reasoned that to enforce an agreement in a contract challenged as 

unlawful “could breathe life into a contract that not only violates state law, 

but also is criminal in nature, by use of an arbitration provision.” Id. at 862 

(quotation omitted).

The United States Supreme Court disagreed, reversing the decision of 

the Florida Supreme Court. In doing so, the Court interpreted section 2 of 

the Federal Arbitration Act (FAA), holding that the arbitration provision in a 

potentially void contract is severable from the remainder of the contract. It 

further rejected the notion that state law controlled on the issue of 

severability, holding: “[W]e cannot accept the Florida Supreme Court’s 

conclusion that enforceability of the arbitration agreement should turn on 

Florida public policy and contract law.” Buckeye, 546 U.S. at 446 (quotation 

omitted). 
9

Having determined that federal law, not state law, controlled the 

question of severability and that, under federal law, the arbitration clause 

was severable from the remainder of the contract, the Court concluded that 

plaintiff’s claims—alleging the contract was usurious and therefore invalid—

must be resolved by the arbitrator: 

We reaffirm today that, regardless of whether the challenge is 

brought in federal or state court, a challenge to the validity of the 

contract as a whole, and not specifically to the arbitration clause, 

must go to the arbitrator. 

Id. at 449. The Court reasoned that a contrary holding “permits a court to 

deny effect to an arbitration provision in a contract that the court later finds 

to be perfectly enforceable.” Id. at 448-49.

B. Granite Rock Co. v. Int'l Bhd. of Teamsters, 561 U.S. 287 (2010)

An isolated reading of Buckeye’s conclusion—that “a challenge to the 

validity of the contract as a whole. . . must go to the arbitrator”—might 

reasonably lead one to conclude that all such challenges must, as a matter 

of law, be resolved in arbitration. However, such a conclusion is belied by 

subsequent Court decisions explaining that the issue in Buckeye was 

severability of the arbitration provision from the remainder of the contract. 

The Court did not specifically address whether the usury claim was subject 

to arbitration under the contract because, given the obviously broad scope 
10

of the contract’s arbitration provision, no discussion of that issue was 

necessary. 

The Court made this point most plainly four years later, in Granite Rock

v. Int’l Bhd. Of Teamsters, 561 U.S. 287 (2010), clarifying its holding in

Buckeye, and reaffirming a trial court’s threshold obligation: when 

considering whether to compel parties to arbitrate a dispute, a trial court is 

required to first determine whether “the parties’ arbitration agreement was 

validly formed and that it covered the dispute in question and was legally 

enforceable.” Id. at 300. The Court further explained: 

That Buckeye and some of our cases applying a presumption of 

arbitrability to certain disputes do not discuss each of these 

requirements merely reflects the fact that in those cases some of 

the requirements were so obviously satisfied that no discussion 

was needed. 

In Buckeye, . . . [t]he arbitration clause's scope was [] not at 

issue, because the provision expressly applied to “ ‘[a]ny claim, 

dispute, or controversy . . . arising from or relating to . . . the 

validity, enforceability, or scope of this Arbitration Provision or 

the entire Agreement.’ ”

Id. at 302-03.

The party opposing arbitration in Buckeye was not contesting whether 

the scope of the arbitration agreement was broad enough to encompass a 

usury claim. Instead, the party opposing arbitration was contending that the 

usurious nature of the contract rendered the entire contract invalid, including 
11

the arbitration clause. Thus, the argument went, the Court could not apply 

the arbitration provision or “rely upon it as evidence of the parties’ consent 

to arbitrate matters within its scope.” Id. at 303. 

The Buckeye Court rejected this argument, and “simply applied the 

requirement in § 2 of the FAA that courts treat an arbitration clause as 

severable from the contract in which it appears and enforce it according to 

its terms unless the party resisting arbitration specifically challenges the 

enforceability of the arbitration clause itself, or claims that the agreement to 

arbitrate was [n]ever concluded.” Id. at 301 (citations and quotations 

omitted). 

Read in proper context—and with the clarity provided in Granite—

Buckeye stands for the proposition that 1) pursuant to federal law, an 

arbitration provision is severable from the rest of the contract; 2) a challenge 

to the validity or enforceability of the contract as a whole (e.g., a usury claim) 

does not preclude arbitration of a dispute or claim which is otherwise within 

the scope of the arbitration provision agreed to by the parties; and 3) an 

exception exists where the party opposing arbitration “specifically challenges 

the enforceability of the arbitration clause itself, or claims that the agreement 

to arbitrate was never concluded.” Id.

C. What did the parties agree to arbitrate?
12

Granite Rock and its clarification of Buckeye’s holding require that we 

“treat an arbitration clause as severable from the contract in which it appears 

and enforce it according to its terms.” Id. (emphasis added). This brings us 

back to the principal consideration in the instant case—what did the parties 

agree to arbitrate? Because the parties in the instant case disagree on the 

scope of the arbitration clause (“broad” v. “narrow”), we must next consider 

the scope of the instant arbitration clause, and whether the language 

requires arbitration of BREA’s claim that the Agreements were illegal and 

unenforceable under Florida’s usury law. 

1. The arbitration clause in the instant case is narrow, not 

broad. 

“A trial court's role in determining arbitrability under the Revised Florida 

Arbitration Code is limited to the following inquiries: (1) whether a valid 

written agreement to arbitrate exists; (2) whether an arbitrable issue exists; 

and (3) whether the right to arbitration was waived.” City of Miami v. 

Fraternal Order of Police Lodge #20, 248 So. 3d 273, 275 (Fla. 3d DCA 

2018) (quotation omitted) (emphasis added). The question presented here 

is whether the usury claim, and the related claims for injunctive and 

declaratory relief, are arbitrable under the Agreement. 

In making this determination, we first consider whether the arbitration 

provision at hand is broad or narrow in scope. The Florida Supreme Court 
13

in Jackson, 108 So. 3d at 593, provided examples to distinguish between 

“broad” and “narrow” arbitration provisions: 

An arbitration provision that is considered to be narrow in scope 

typically requires arbitration for claims or controversies “arising 

out of” the subject contract. This type of provision limits 

arbitration to those claims that have a direct relationship to a 

contract's terms and provisions. In contrast, an arbitration 

provision that is considered to be broad in scope typically 

requires arbitration for claims or controversies “arising out of or 

relating to” the subject contract. The addition of the words 

“relating to” broadens the scope of an arbitration provision to 

include those claims that are described as having a “significant 

relationship” to the contract—regardless of whether the claim is 

founded in tort or contract law. 

(Emphasis added) (citations omitted). See also Seifert, 750 So. 2d at 636-7 

(observing that clauses covering all claims or controversies “arising out of”

or “under” the subject contract have been considered by some courts to be 

narrow in scope and arbitration under such provisions is limited to those 

claims having some direct relation to the terms and provisions of the 

contract); Hedden v. Z Oldco, LLC, 301 So. 3d 1034, 1039 (Fla. 2d DCA 

2019) (finding that arbitration clause was broad where clause required 

arbitration of “‘[a]ny dispute, controversy or claim arising out of or relating to’

the Compensation Agreement”) (citing O'Keefe Architects, Inc. v. CED 

Const. Partners, Ltd., 944 So. 2d 181, 188 (Fla. 2006) (noting: “In this case, 

the parties agreed to a broad provision that requires arbitration of ‘[c]laims, 

disputes, and other matters . . . arising out of or relating to’ the contract.”)) 
14

(emphasis added); Heller v. Blue Aerospace, LLC, 112 So. 3d 635, 636 (Fla. 

4th DCA 2013) (finding that the contract contained a narrow arbitration 

provision where the parties agreed to “submit all disputes, controversies and 

claims arising under this Agreement to binding arbitration”) (emphasis 

added).

Applying the well-established case law to the arbitration clause in the 

Agreements, we conclude that the language used is undoubtedly narrow: 

Any dispute under this Agreement or any Exhibit attached 

hereto shall be submitted to arbitration under the American 

Arbitration Association (the “AAA”) in New York City, New York . 

. . .

(Emphasis added.) 

Of note, the arbitration language here is significantly narrower than that 

in Buckeye, which required arbitration of “[a]ny claim, dispute, or controversy 

. . . arising from or relating to this Agreement . . . or the validity, 

enforceability, or scope of this Arbitration Provision or the entire 

Agreement . . ..” Buckeye, 546 U.S at 442 (emphasis added).4 

4 Again, the broad language of the Buckeye arbitration provision illustrates 

the focus of the parties’ disagreement in Buckeye was not on whether an 

arbitrable issue existed. Instead, the question was whether the rule of 

severability of an arbitration provision was limited in application to federal 

courts or applied equally to state courts. Indeed, given the sweeping

language of Buckeye’s arbitration provision, it is understandable the Court 

saw no need to address whether a claim challenging the entire agreement 

(as usurious) was arbitrable.
15

In addition, while the language used in an agreement’s forum selection 

provision is generally irrelevant to determining whether the language of an 

agreement requires arbitration of a particular claim or dispute, it is worth 

noting that the forum selection provision in the instant Agreements 

demonstrates the parties were fully capable of crafting a broad arbitration 

provision given the language they used in the immediately preceding 

paragraph of the Agreement: 

This Agreement shall be governed by and construed in 

accordance with the laws of the State of New York, United States 

of America. The Parties agree to submit themselves to the 

jurisdiction of the courts situated within the State of New York 

with regard to any controversy arising out of or relating to this 

Agreement.

Any dispute under this Agreement or any Exhibit attached 

hereto shall be submitted to arbitration under the American 

Arbitration Association (the “AAA”) in New York City, New York . 

. . .

(Emphasis added). The use of this language and juxtaposition of these two 

paragraphs suggests the parties intended to create an arbitration provision

that was narrow in scope.

Concluding that the arbitration clause is narrow, we must next 

determine whether the usury claim arises “under the Agreement” and has a 

“direct relationship” to the narrow arbitration provision. 
16

a. The usury claim in this case does not arise “under 

the Agreement” and does not have a “direct 

relationship” to the Agreement.

Appellants contend that the usury claim (and the related declaratory 

and injunctive claims premised on usury) are not arbitrable because the 

claim “arises under” Florida’s usury statute rather than under the Agreement 

itself. That is, the duty and obligation not to commit usury, and the resulting 

illegality of the Agreement, arise under state statutory law. It follows, 

appellants urge, that this narrow arbitration provision, by which the parties 

agreed to arbitrate “any dispute under the Agreement” does not include a 

claim that the Agreement is illegal or unenforceable under Florida’s usury 

law. We agree.

As the Florida Supreme Court has explained, such a narrow arbitration 

provision “limits arbitration to those claims that have a direct relationship to 

a contract’s terms and provisions.” Jackson, 108 So. 3d at 593 (emphasis 

added). “In contrast, when a contract contains a broad arbitration provision, 

the court will compel arbitration when the party's claims have a ‘significant 

relationship’ to the contract.” Vanacore Constr., Inc. v. Osborn, 260 So. 3d 

527, 530 (Fla. 5th DCA 2018) (citing Jackson,108 So. 3d at 593).

Because these two tests—the “direct relationship” test for narrow 

arbitration provisions and the “significant relationship” test for broad 
17

arbitration provisions—are not particularly intuitive, it is helpful to consider 

the case law further defining these tests. We note that there is relatively little 

case law in Florida expounding on the more rigorous “direct relationship” test 

for narrow arbitration provisions as compared to the abundance of case law 

on the more arbitration-friendly and more easily satisfied “significant 

relationship” test applied to broad arbitration provisions. And because the 

significant relationship test is easier to satisfy, we recognize that if the narrow 

arbitration provision at issue cannot meet that less-rigorous test for 

arbitrability of broad provisions, it necessarily cannot meet the more-rigorous 

“direct relationship” test for arbitrability of narrow provisions. 

In Seifert, 750 So. 2d at 638-39, the Florida Supreme Court explained 

that, to submit a claim to arbitration, the “significant relationship” test requires 

“some nexus between the dispute and the contract containing the arbitration 

clause.” The Court further explained:

[T]he mere fact that the dispute would not have arisen but for the 

existence of the contract and consequent relationship between 

the parties is insufficient by itself to transform a dispute into one 

“arising out of or relating to” the agreement. 

***

[F]or a tort claim to be considered “arising out of or relating to”

an agreement, it must, at a minimum, raise some issue the 

resolution of which requires reference to or construction of some 

portion of the contract itself.

***

If the contract places the parties in a unique relationship that 

creates new duties not otherwise imposed by law, then a dispute 
18

regarding a breach of a contractually-imposed duty is one that 

arises from the contract. Analogously, such a claim would be one

arising from the contract terms and therefore subject to 

arbitration where the contract required it. If, on the other hand, 

the duty alleged to be breached is one imposed by law in 

recognition of public policy and is generally owed to others 

besides the contracting parties, then a dispute regarding 

such a breach is not one arising from the contract, but 

sounds in tort. Therefore, a contractually-imposed arbitration 

requirement . . . would not apply to such a claim.

Seifert, 750 So. 2d at 638-39 (emphasis added) (citations and quotations 

omitted). This “contractual nexus” component of the significant relationship 

test was reaffirmed by the Florida Supreme Court in Jackson:

[A] claim has a nexus to a contract and arises from the terms of 

the contract if it emanates from an inimitable duty created by the 

parties' unique contractual relationship. In contrast, a claim does 

not have a nexus to a contract if it pertains to the breach of 

a duty otherwise imposed by law or in recognition of public 

policy, such as a duty under the general common law owed 

not only to the contracting parties but also to third parties 

and the public.

Jackson, 108 So. 3d at 593 (emphasis added).

In the instant case, we have a narrow arbitration provision (requiring 

the parties to arbitrate “[a]ny dispute under this Agreement”) and a usury 

claim premised upon a duty imposed by Florida statute. Even applying the 

less-rigorous “significant relationship/contractual nexus” test typically 

reserved for broad arbitration provisions, it is clear this usury claim is not 

arbitrable: it cannot be said that the usury claim arises “under the 
19

Agreement” because “the duty alleged to be breached is one imposed by 

law in recognition of public policy and is generally owed to others besides 

the contracting parties.”5 It simply cannot satisfy Seifert and Jackson’s 

requirement that the claim “emanate[] from an inimitable duty created by the 

parties’ unique contractual relationship;” instead, the instant claim is one that 

“pertains to the breach of a duty otherwise imposed by law or in recognition 

of public policy, such as a duty under the general common law owed not only 

to the contracting parties but also to third parties and the public.” Jackson, 

108 So. 3d at 593.6 As a result, if this claim cannot be said to have a 

5 As observed in Dunn v. Global Trust Management, 506 F. Supp. 3d 1214, 

1222 (M.D. Fla. 2020): 

Usury has been forbidden for millennia by civilized society. The 

strong victimize the weak. It makes the rich richer and the poor 

poorer. The Code of Hammurabi (circa 1750 B.C.) barred usury. 

Both Plato and Aristotle noted it is immoral and unjust. The 

Roman Code of Justinian barred usury, as did the Abrahamic 

religions. The prophet Ezekiel listed usury among abominations 

like violence and rape. See Ezekiel 18:8-21. In The Inferno, 

Dante placed usurers in the seventh circle of hell—below 

murderers. Shakespeare of course illustrated its corrosive traits 

in the notorious The Merchant of Venice. Usury and loansharking 

were outlawed in all the American colonies, following English 

common law practice. And usury is a crime in Florida, see Fla. 

Stat. § 687.071. . . . 

(Footnotes omitted.)

6 We recognize that this usury claim satisfies one portion of the significant 

relationship/contractual nexus test, which requires that “for a tort claim to be 
20

“significant relationship” to the Agreement, it self-evidently cannot satisfy the 

more rigorous requirement that it bear a “direct relationship” to the 

Agreement.

This is not to say that a usury claim, as a matter of law, can never be 

subject to arbitration.7 It simply means that a claim such as this will generally 

considered ‘arising out of or relating to’ an agreement, it must, at a minimum, 

raise some issue the resolution of which requires reference to or construction 

of some portion of the contract itself.” Seifert, 750 So. 2d at 638. See also

Jackson, 108 So. 3d at 593 (“A contractual nexus exists between a claim 

and a contract if the claim presents circumstances in which the resolution of 

the disputed issue requires either reference to, or construction of, a portion 

of the contract.”) Nevertheless, this is only one aspect of what Seifert and 

Jackson require, even when analyzing the scope of a broad arbitration 

provision. The narrow arbitration provision agreed to by the parties in the 

instant case cannot satisfy the remaining aspects of the contractual nexus 

test because the usury claim does not “emanate[] from an inimitable duty 

created by the parties’ unique contractual relationship,” but instead is a claim 

that “pertains to the breach of a duty otherwise imposed by law or in 

recognition of public policy, such as a duty under the general common law 

owed not only to the contracting parties but also to third parties and the 

public.” Jackson, 108 So. 3d at 593. 

7 To the extent that Party Yards (and its progeny, FastFunding The

Company, Inc. v. Betts, 758 So. 2d 1143 (Fla. 5th DCA 2000)) held in 

absolute terms that any usury claim, as a matter of law, cannot be arbitrated 

regardless of the narrow or broad scope of the parties’ agreement to 

arbitrate, such a holding was disapproved by the United States Supreme 

Court’s decision in Buckeye, 546 U.S. at 445-46, as reflected in the Florida 

Supreme Court’s decision on remand, see Buckeye, 930 So. 2d at 611:

In the Fourth District's decision in Cardegna, the court held that 

a borrower's claim that a contract was void ab initio under Florida 

law and public policy must be resolved by arbitration where there 

was no separate claim that the arbitration provision in the 
21

not be subject to arbitration under a narrow arbitration provision such as the 

one agreed to by the parties in the instant case. But a usury claim can be

subject to arbitration if the language of the arbitration provision is broad 

enough to express the parties’ intent that such a claim or dispute will be 

subject to arbitration, which is precisely what the Court held in Buckeye, 

given the broad language contained in the arbitration agreement in that 

case.8

contract itself was unenforceable. This Court quashed and held 

that the dispute as to the validity of the contract must first be 

resolved in court before the arbitration provision could be 

enforced. In turn, the United States Supreme Court has reversed 

this Court's decision, and, in effect approved the holding of the 

Fourth District.

Accordingly, consistent with and pursuant to the United States 

Supreme Court's decision, we withdraw our previous opinion and 

now approve the decision of the Fourth District and disapprove 

of the conflicting opinion of the Fifth District in Fastfunding the 

Company, Inc. v. Betts, 758 So.2d 1143 (Fla. 5th DCA 2000).

What remains of Party Yards is its strict holding, based upon the narrow 

arbitration provision (providing that “any controversy arising under this 

Agreement shall be submitted to arbitration”), that “the arbitration provision 

of the contract is not broad enough to encompass a usury violation” and thus

the statutory usury claim did not “arise under” the agreement but arose only 

under Florida statutory law. Id. at 123. We agree with this holding and find 

it fully applicable here.

8 “Any claim, dispute, or controversy. . . arising from or relating to this 

Agreement. . . or the validity, enforceability, or scope of this Arbitration 

Provision or the entire Agreement. . . shall be resolved. . . by binding 

arbitration. . . . .” Buckeye, 546 U.S. at 442 (emphasis added).
22

IV. CONCLUSION

Given the narrow language contained in the arbitration provision of the 

parties’ underlying agreement, we conclude that the usury and usury-related 

claims do not “arise under the Agreement,” do not satisfy the “direct 

relationship” test of Seifert and Jackson, and are not subject to arbitration. 

We reverse the trial court’s order dismissing the action without prejudice and 

compelling arbitration in New York and remand for further proceedings 

consistent with this opinion.9 

9 Appellants also challenge the trial court’s order dismissing based on 

improper venue (forum selection) and its order determining that New York 

substantive law applies. We reverse the order on these two issues as well. 

With regard to these issues, the Agreement provides in pertinent part:

This Agreement shall be governed by and 

construed in accordance with the laws of the 

State of New York, United States of America. The 

Parties agree to submit themselves to the 

jurisdiction of the courts situated within the State 

of New York with regard to any controversy 

arising out of or relating to this Agreement.

(Emphasis added). Because this is a permissive forum selection clause, the 

trial court erred in requiring that “any judicial proceedings [] be brought in a 

court of competent jurisdiction in the State of New York.” Rudman v. 

Numismatic Guar. Corp. of Am., 298 So. 3d 1212, 1214 (Fla. 3d DCA 2020) 

(holding: “Mandatory forum selection clauses require or unequivocally 

specify . . . that a particular forum be the exclusive jurisdiction for litigation 

concerning the contract. Whereas, permissive forum selection clauses 

constitute nothing more than a consent to jurisdiction and venue in the 

named forum and do not exclude jurisdiction or venue in any other forum. 
23

Hence, forum selection clauses that lack mandatory or exclusive language 

are generally found to be permissive”) (citations and quotations omitted).

Compare with Michaluk v. Credorax (USA), Inc., 164 So. 3d 719, 725 (Fla. 

3d DCA 2015) (finding the following forum selection clause to be permissive: 

“This Agreement shall be governed by and construed in accordance with the 

Laws of Malta and each party hereby submits to the jurisdiction of the Courts 

of Malta as regards any claim, dispute or matter arising out of or in 

connection with this Agreement, its implementation and effect.”) 

As to the trial court’s determination that New York substantive law would 

apply, we note the trial court need not have reached this issue once it 

determined the claims were to be arbitrated and that further proceedings 

were to take place in a New York forum. Further, while the forum selection 

and arbitration issues presented questions of law, the choice-of-law issue 

presented not only a question of law, but questions of fact as well, see, e.g., 

§ 671.105(1), Fla. Stat. (2020) (providing: “Except as provided in this section, 

when a transaction bears a reasonable relation to this state and also to 

another state or nation, the parties may agree that the law either of this state 

or of such other state or nation will govern their rights and duties”), which 

were not fully developed or analyzed on the record before us. We do not 

reach the merits of the choice-of-law issue, but reverse this remaining portion 

of the orders on appeal and remand for further proceedings as may be 

appropriate.