Opinion ID: 1855835
Heading Depth: 1
Heading Rank: 5

Heading: Words

Text: At the outset, we must note that courts around the country, as well as courts here in Florida, have pronounced differing views on the interpretation of contracts and their arbitration provisions. Not surprisingly, courts have given different meaning to clauses on the basis of the actual terminology used. For example, clauses including all claims or controversies arising out of the subject contract have been considered by some courts to be narrow in scope; i.e., the scope of the arbitration clause is limited to those claims having some direct relation to the terms and provisions of the contract. See Mediterranean Enters., Inc. v. Ssangyong Corp., 708 F.2d 1458, 1464 (9th Cir.1983); In re Kinoshita & Co., 287 F.2d 951, 953 (2d Cir.1961). Both Mediterranean and Kinoshita hold that claims alleging breach of a separate and unrelated contract, breach of fiduciary duty, and quantum meruit, none of which rely on the interpretation or performance of the contract containing the arbitration clause, are not subject to arbitration as disputes arising out of the contract. These cases reason that where an arbitration clause refers solely to disputes or controversies under or arising out of the contract, arbitration is restricted to claims relating to the interpretation of the contract and matter of performance. Mediterranean Enters., 708 F.2d at 1464 (quoting Kinoshita, 287 F.2d at 953). On the other hand, the phrase arising out of or relating to the contract has been interpreted broadly to encompass virtually all disputes between the contracting parties, including related tort claims. [3] See Southland Corp. v. Keating, 465 U.S. 1, 15 n. 7, 104 S.Ct. 852, 79 L.Ed.2d 1 (1984) (involving claims for fraud, misrepresentation, breach of contract, breach of fiduciary duty, and violation of state franchise investment law); Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 406, 87 S.Ct. 1801, 18 L.Ed.2d 1270 (1967) (holding that contractual language [a]ny controversy or claims arising out of or relating to this Agreement, or breach thereof is easily broad enough to encompass claim for fraud in inducement of contract). The addition of the phrase relating to to the phrases arising out of or under, has been construed as broadening the scope of the arbitration provision. See American Recovery Corp. v. Computerized Thermal Imaging, Inc., 96 F.3d 88, 93 (4th Cir.1996) (characterizing phrase arise out of or related to as broad arbitration clause capable of an expansive reach). According to the Fourth Circuit in American Recovery Corp., [4] the test for determining arbitrability of a particular claim under a broad arbitration provision is whether a significant relationship exists between the claim and the agreement containing the arbitration clause, regardless of the legal label attached to the dispute (i.e., tort or breach of contract). See id. at 93-94; cf. Bachus & Stratton, Inc. v. Mann, 639 So.2d 35, 36 (Fla. 4th DCA 1994) (upholding trial court order compelling arbitration where employee's post-employment claims involved significant aspects of the employment relationship). In applying this standard, the court focused on the factual allegations of the complaint to determine whether those allegations implicated the contractual agreement and hence the arbitration clause. See American Recovery Corp., 96 F.3d at 94; see also Gregory, 83 F.3d at 384 (Whether a claim falls within the scope of an arbitration agreement turns on the factual allegations in the complaint rather than the legal causes of action asserted.).