Opinion ID: 1671260
Heading Depth: 1
Heading Rank: 3

Heading: arbitration code

Text: While we have found on this record a sufficient basis for the trial court to act, we recognize the need for clarification of a trial court's authority under the arbitration code on this issue in order to avoid similar problems in the future. Although we approve the trial court's action, we acknowledge, as noted above, that there appears to be a great deal of uncertainty concerning the procedure for the award of attorney's fees in arbitration proceedings. This confusion is only exacerbated when an award fails to set out the basis for the award and a trial court must look for signals or speculate as to the basis of an award in exercising its statutory authority to determine and award fees. The Florida Arbitration Code provides little guidance as to the contents of an award but, instead, focuses on the procedural framework within which the parties may seek to confirm, vacate, or modify an award. [4] See Air Conditioning Equipment, Inc. v. Rogers, 551 So.2d 554, 556 (Fla. 4th DCA 1989). For example, section 682.09(1), states that [t]he award shall be in writing and shall be signed by the arbitrators. Section 682.14(1)(c) provides for the modification or correction of an award where [t]he award is imperfect as a matter of form, not affecting the merits of the controversy. Last, section 682.13 provides a list of criteria upon which an award may be challenged. However, it is limited to concerns which may taint the process such as fraud, partiality and the like, and says nothing about the essentials of an award. See id. Under the code it has been held that an award does not have to reflect the precise reasoning, findings of facts, conclusions of law, or ultimately the basis upon which a decision was arrived at by the arbitrators. See generally Prudential-Bache Securities, Inc. v. Shuman, 483 So.2d 888, 889 (Fla. 3d DCA 1986). The Shuman court reasoned that the legal basis of an award is immaterial to the subsequent determination by a trial court of whether an award should be vacated. See id. (The fact that the relief granted is such that it could not or would not be granted by a court of law or equity is not a ground for vacating or modifying the award.). This view appears to be consistent with a policy favoring the termination of disputes with an arbitration decision and limited review by the courts. Notwithstanding our recognition of this underlying policy, we find the practice of arbitrators not disclosing the basis upon which an award is made inadequate and inconsistent with the policy goals of the arbitration process as provided by the Florida Legislature with regard to the award of attorney's fees. As noted above, the code vests exclusive authority, absent waiver by the parties, over the award of fees in the circuit court. We do not believe that the Legislature on the one hand would have vested the authority in trial courts to resolve the attorney's fees issue, and, yet, on the other hand, would have restricted that authority by not permitting trial courts to compel the assistance of arbitrators in order to determine the issue. The NASD's practice of discouraging disclosure of the basis of an award as described in the trial court proceedings also raises concerns as to the due process rights of the parties as it relates to a property interest in recovering attorney's fees incurred in litigating securities violations cases. [5] The courts have long held that rights to attorney's fees granted by statute are substantive rather than procedural. See, e.g., U.S. Security Insurance Co. v. Cahuasqui, 760 So.2d 1101, 1107 (Fla. 3d DCA 2000). As such, the due process standards necessary in safeguarding such a right must provide for a meaningful, full, and fair hearing to the affected individual. Rucker v. City of Ocala, 684 So.2d 836, 841 (Fla. 1st DCA 1996). In the instant case, the record reveals that Moser, a sixty-seven-year-old clerk at a pharmacy at the time, invested her savings and retirement funds with Barron. The broker in charge of Moser's investments allegedly committed various irregularities resulting in the depletion of Moser's funds. As previously mentioned, section 517.211(6) provides remedies, including the payment of attorney's fees, for just the kind of irregularities allegedly committed by Barron. However, since Moser brought her claim under several theories and the award fails to specify the basis for her recovery, the respondent contends that she is not entitled to fees since one cannot tell on the face of the award whether she is entitled to recovery of fees. In effect, then, the arbitrators' arbitrary action in failing to indicate the basis of an award would effectively deprive Moser of not just a meaningful, full, and fair hearing, Rucker, 684 So.2d at 841, but of any hearing at all on the denial of a property interest in attorney's fees expressly provided for by section 517.211(6). [6] The Fifth District rightfully expressed concern about such an outcome in Kirchner wherein it opined, It would be an empty victory for [a claimant] to have prevailed in obtaining redress from her broker who violated the consumer protection provisions of the securities law if she now had to use her recovered investment to pay the fees to her lawyer made necessary by defendant's violation of its statutory duty. 732 So.2d at 484. We agree with this concern. We hold today that where a party brings claims in arbitration based upon several theories, one or more of which provide for the recovery of attorney's fees, the arbitration award must specify the theory under which the claimant prevailed, or otherwise clearly indicate whether the claimant has prevailed on a theory that would permit the trial court to award fees. In the event that the award fails to reflect such a finding, the circuit court may remand the matter to the arbitration panel for the purpose of resolving the issue. Thereafter, the circuit court may determine the fee issue in accord with the finding of the arbitrators. We believe this holding is implicitly mandated by Florida's statutory schemes, both as to attorney's fees and arbitration, and especially the code provision vesting authority in the circuit court to award fees. Section 682.14(1)(c) of the code also provides for the modification or correction of an award where the award is inadequate as a matter of form. We conclude that to the extent that knowledge of the basis of an award is necessary for the subsequent determination of an entitlement to attorney's fees, an award without a basis is per se inadequate and subject to correction by the trial court. Accordingly, based on the foregoing, we quash that part of the Second District's decision in Moser which reversed the trial court's ruling in its determination of the issue of entitlement to attorney's fees, and remand this case to the district court for further proceedings consistent herewith. It is so ordered. WELLS, C.J., and SHAW, HARDING, PARIENTE, LEWIS and QUINCE, JJ., concur.