Opinion ID: 76737
Heading Depth: 3
Heading Rank: 2

Heading: Does the arbitration proceeding bar this lawsuit?

Text: 28 Nevertheless, the district court did find the arbitration to be complete enough to be res judicata, completely barring Dadeland from bringing this bad-faith claim. The district court determined that Dadeland's claims were not really bad-faith claims, but were actually claims for breach of the Sureties' contractual duty to timely settle valid claims. As a breach of contract claim, the district court reasoned that Dadeland could have and should have raised this claim in its arbitration complaint. Thus, by not raising it there, the district court concluded that the claim was waived. 29 Dadeland argues that the district court was incorrect in its assessment that its claims were really breach of contract claims and points out that the only statutory basis for their claims listed in their complaint are the Florida bad-faith statutes. 4 Dadeland then argues that it could not possibly have asserted its bad-faith claims in its arbitration complaint because, at the time of the arbitration, Dadeland did not have an adjudication in its favor showing that it had a valid claim against the Sureties. Dadeland states that one purpose of the arbitration was to satisfy the condition precedent to bringing this claim. 30 Given the confusion as to the effect of this arbitration proceeding, we certify the following questions to the Supreme Court of Florida: 31 1. IS THE ARBITRATOR'S FINDING THAT A SURETY'S PRINCIPAL HAS BREACHED ITS DUTY TO THE OBLIGEE, AND THAT THE SURETY IS BOUND TO THE ARBITRATION AWARD TO THE EXTENT THAT ITS PRINCIPAL IS BOUND, SUFFICIENT TO SATISFY THE CONDITION PRECEDENT TO A LATER BAD-FAITH REFUSAL-TO-SETTLE CLAIM THAT THERE BE A PRIOR ADJUDICATION THAT THE PLAINTIFFS WERE ENTITLED TO A PAYMENT OF A CLAIM FROM THE SURETIES? 32 2. IF NOT, IS THAT ARBITRATOR'S DECISION RES JUDICATA, THUS BARRING DADELAND'S LATER CLAIM AGAINST THE SURETIES FOR BAD-FAITH REFUSAL TO SETTLE? 33 3. DOES THE ARBITRATOR'S DISMISSAL OF THE SURETIES' AFFIRMATIVE DEFENSES COLLATERALLY ESTOP THEM FROM RAISING THE SAME DEFENSES IN THIS SUIT? 34 Finally, Dadeland argues that the district court erred when it denied Dadeland's motion for partial summary judgment with respect to two of the sureties' affirmative defenses: (1) that Dadeland failed to comply with the provisions of the performance bond and (2) that the Sureties are [d]ischarged from liability under the performance bond to the extent that [Dadeland] made payments to Walbridge for the work performed under the construction contract. R1-36 at 4. Dadeland argues that these are equivalent to the defenses the Sureties raised in the arbitration proceeding, and which the arbitrator rejected. As a result, Dadeland contends that the Sureties are collaterally estopped from raising these same defenses in this case. 35 At first glance, Dadeland appears to be correct that the defenses are the same. In the arbitration, the Sureties argued that Dadeland's Failure to Comply With the Terms of the Bond Bars Its Claim and that Dadeland's Improper Payments to Walbridge Bar or Limit Dadeland's claim Against [the Sureties]. R2-66, Ex. A at 4, 11. However, the Sureties argue that these defenses function differently in this case because this is a bad-faith claim rather than a breach-of-contract claim, as was at issue in the arbitration proceeding. 5 36 Because we are unsure of the effects of the prior arbitration on this case under Florida law, we also certify this question to the Supreme Court of Florida: 37 WILL AN ARBITRATOR'S DENIAL OF THE DEFENDANT'S AFFIRMATIVE DEFENSES IN A BREACH OF CONTRACT CLAIM COLLATERALLY ESTOP THE SAME DEFENDANTS FROM RAISING THE SAME DEFENSES IN A SUBSEQUENT BAD-FAITH REFUSAL-TO-SETTLE CLAIM AGAINST THE SAME PLAINTIFF?